Concrete Menders Pty Ltd v Ghiasvand & Ghiasvand
[2024] ACTMC 25
•18 October 2024
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Concrete Menders Pty Ltd v Ghiasvand & Ghiasvand; Ghiasvand & Ghiasvand v Flexible Constructions Pty Ltd (No 2) |
Citation: | [2024] ACTMC 25 |
Hearing Date: | 2 April 2024 |
DecisionDate: | 18 October 2024 |
Before: | Special Magistrate Hassall |
Decision: | The orders of the Court are: The costs of and relating to the vacation of the original hearing dates (2-5 April 2024) are to be costs in the cause. |
Catchwords: | CIVIL - COSTS – vacation of hearing dates on first day of trial – late service of witness statements in reply and failure to comply with duty of disclosure – further witness statements and discovery required to respond to factual contentions abandoned at trial or found to be scandalous or dishonest – appropriate order that costs be costs in the cause. |
Legislation Cited: | Court Procedures Act 2005 (ACT), s 5A(4) |
Cases Cited: | Pham v Enterprise ICT Pty Ltd (No 2) [2017] NSWSC 583 |
Parties: | Concrete Menders Pty Ltd (Plaintiff) Kobra Ghiasvand ( First Defendant) Ali Ghiasvand (Second Defendant) Flexible Constructions Pty Ltd (Third Party) |
Representation: | Counsel B Buckland ( Plaintiff and Third Party) J Moffett ( First and Second Defendants ) |
| Solicitors Johannessen Legal ( Plaintiff and Third Party) Bradley Allen Love Lawyers ( First and Second Defendants) | |
File Number: | CS 60 of 2023 |
SPECIAL MAGISTRATE HASSALL
The substantive hearing of these proceedings took place before me in the week commencing 1 July 2024. I gave my decision in relation to that hearing on 9 October 2024, the effect of which, broadly, was to uphold the plaintiff’s claim against the defendants and to dismiss the defendants’ claim against the third party (“principal decision”). This decision and the principal decision should be read together. Terms used in this decision have the same meaning as in the principal decision.
The remaining issue relates to a question of reserved costs arising from an earlier decision by me to vacate the original hearing dates, which were to have been 2 to 5 April 2024. My decision to vacate those dates was made with the consent of the parties, but on the basis that the defendants sought an order for their costs thrown away to be paid by the plaintiff and third party on a solicitor and client basis from 10 October 2023.
All of the witness statements which the parties had served on each other in the leadup to the hearing were tendered on the costs application. By agreement, I reserved my decision until after the substantive hearing. This was so that I would have a better understanding of the case and so that I would have time to read the witness statements. The parties, through their legal representatives, affirmed that they did not object to this course.
As it happened, all of the evidence at the substantive hearing, including each witness’s evidence in chief, was given orally. There were only a couple of instances where witnesses were taken to their written statements in cross-examination; none of the written statements were actually tendered.
In the circumstances, I had no regard to the witness statements in connection with my decision regarding the substantive proceedings.
Basis for defendants’ application for costs thrown away
The defendants submit that it was the fault of the plaintiff and third party, together, that the original hearing dates were required to be vacated.
The plaintiff and third party were represented by the same legal team throughout the substantive hearing. Their cases were co-extensive – the third party adopted all of the evidence and submissions of the plaintiff and vice versa. It is therefore appropriate to consider whether the plaintiff and third party together ought to pay the costs sought by the defendants.
There were two main reasons for the vacation of the original hearing dates. First, the plaintiff and third party had served further witness statements, said to be “in reply”, only in the fortnight immediately preceding the hearing. That occurred in circumstances where the court had made orders for the plaintiff’s and third party’s witness statements to be served by 10 October 2023 and the defendants were to serve their witness statements by 8 December 2023. No order was made for service of statements in reply.
Second, and perhaps more significantly, despite multiple requests, made by various means, the plaintiff and third party had not provided disclosure of phone records of the two individuals who were, respectively, the sole directors of the plaintiff and third-party companies. This was said by the defendants to be directly relevant to their ability to cross-examine effectively the plaintiff and third-party witnesses, including against the witness statements served in reply. There was also a request for disclosure of bank records.
Relevantly, the plaintiff itself had on 22 September 2023 requested from the defendants discovery of “any discoverable material, in whatsoever form, on which the Defendants rely to assert the Plaintiff and the Third Party were known to each other prior to the construction of the Property”. Given that request, it is difficult to see how a request by the defendants for discovery of documents falling within that same classification (i.e. going to whether or not the plaintiff and third party were already known to each other) could be asserted by the plaintiff to amount to a “fishing expedition”. If it was such an expedition, it was one which the plaintiff and third party (through their lawyers) had already willingly embarked upon. Nevertheless, the plaintiff and third party, through their lawyer, objected to discovery on precisely this basis via a letter of 19 October 2023.
Counsel for the plaintiff and third party ultimately agreed (at the interlocutory hearing before me on 2 April 2024) that the sought-after phone records were properly discoverable. Once this concession was (rightly) made, the vacation of the hearing dates became inevitable.
On this basis, the defendants have established a prima facie basis on which an order should be made for the plaintiff and third party to pay their costs thrown away by reason of the vacation of the original hearing dates. That is not, however, the end of the matter.
Closer examination of the merits of the costs application
As I have noted, the defendants’ witness statements were served between late November and mid-December 2023. They comprised witness statements from each of the defendants (Mrs Ghiasvand and Mr Ghiasvand Jnr), from Mr Ghiasvand Snr and from Mr Ali Masoumi, a one-time part-owner and employee of the plaintiff company.
The defendants’ witness statements were controversial in the sense that, in numerous respects, they were squarely inconsistent with what was recounted in the plaintiff’s and third party’s witness statements (which had been served mostly in October 2023). As I noted in my decision in the substantive proceedings, the case of the plaintiff (which was both consistent with the case of, and adopted by, the third party) was that it had entered into an oral contract with the defendants to perform concreting services at the Taylor Site and never had any contractual relationship with the third party (with whom the defendants entered a standard form written contract apparently for the construction of the entire residence, including concreting work, at the Taylor Site).
Among other things, in the defendants’ witness statements:
1.Mr Masoumi asserted that the sole directors of the plaintiff and third-party companies respectively, Mr Kehrig and Mr Shahbaz, were known to each other prior to their work at the Taylor Site, with Mr Kehrig having supposedly told Mr Masoumi stories about the two of them “partying and taking drugs”.
2.Mr Masoumi asserted a belief that the invoices which the plaintiff said it had sent to the defendants were not “genuine invoices”.
3.Mr Masoumi asserted that, in late June 2021, on behalf of the plaintiff, he had sent a quote to the third party in respect of the proposed provision of concreting services at the Taylor Site. If true, this was completely inconsistent with the cases of the plaintiff and third party, in that it strongly suggested a sub-contractual relationship between the third party and the plaintiff.
4.Mr Masoumi asserted that another former employee of the plaintiff, Ms Mahsa Nazemi, had confessed to him, and Mr Kehrig had later confirmed, that the plaintiff had received a cash payment of $55,000 for the concreting work from the third-party builder.
5.Mrs Ghiasvand, Mr Ghiasvand Jnr and Mr Ghiasvand Snr each asserted that in June 2021 they had attended a meeting at the Taylor Site with Mr Shahbaz and Mr Kehrig.
6.Mrs Ghiasvand asserted that, sometime after 23 June 2021, she and Mr Ghiasvand Jnr had made a cash payment of $25,000 to Mr Shahbaz at the premises of VIP Cuts in Belconnen; Mr Ghiasvand Jnr also made reference to this alleged payment.
7.Mr Ghiasvand Snr denied that he was or had been a friend of Mr Kehrig.
8.Mr Ghiasvand Jnr and Mr Ghiasvand Snr stated that their contract with the third-party builder had come to an end only after Mr Shahbaz demanded more money to finish the construction work, tacitly admitted to spending money on cocaine, and (supposedly) stated to Mr Ghiasvand Snr that he would “break [his] legs” if he came on to the Site.
Many of the factual contentions referred to above were never asserted at the substantive hearing. Others were initially asserted but then abandoned. By way of example, I refer to the following:
1.Notwithstanding the contents of Mr Masoumi’s and each of the Ghiasvands’ witness statements, the defendants ran a positive case that the first time that Mr Kehrig and Mr Shahbaz ever communicated with each other was during phone calls on 12 July 2021. There was no suggestion that they were friends who engaged in “partying and taking drugs” together and the suggestion that the Ghiasvands had attended a meeting with both Mr Shahbaz and Mr Kehrig at the Taylor Site in June 2021 was abandoned.
2.Contrary to the suggestion of Mr Masoumi that the invoices attached to the plaintiff’s witness statements were “not genuine”, Mr Ghiasvand Jnr admitted in cross-examination having actually received each one of those invoices referred to in the plaintiff’s evidence. No suggestion was made at the hearing that there was anything irregular at all about the invoices.
3.Each of Mrs Ghiasvand and Mr Ghiasvand Snr admitted that they had been friends with Mr Kehrig and Mr Ghiasvand Jnr admitted that he was aware of the mutual friendship between his parents and Mr Kehrig.
4.None of the Ghiasvands asserted that their contractual relationship with the third-party builder came to an end in the circumstances described in their witness statements, nor that Mr Shahbaz had said the things attributed to him in those statements, nor was any of this put to Mr Shahbaz in cross-examination. This entire version of events appears to have been abandoned.
Further, in respect of the “quote” referred to in the witness statement of Mr Masoumi, although this was initially raised with some of the plaintiff’s witnesses in cross-examination, the defendants abandoned any attempt to prove its authenticity. Ultimately, for the reasons set out in the principal decision, I was satisfied that the supposed “quote” was a fabrication which was never sent.
In respect of the supposed confession by Ms Nazemi and Mr Kehrig of a cash payment of $55,000 from the third-party builder to the plaintiff, again, although this was initially raised with some of the plaintiff’s witnesses, the defendants abandoned any attempt to prove the payment part way through the hearing – for example, it was never even put to Mr Shahbaz. Ultimately, for the reasons set out in the principal decision, I was satisfied that the payment never occurred and that the asserted confessions of such a payment were a fabrication.
As to the supposed payment of $25,000 cash by the defendants to Mr Shahbaz in June 2021, Mrs Ghiasvand gave no evidence about this alleged payment at all. Mr Ghiasvand Jnr did give evidence about it, but counsel for the defendants ultimately conceded I could not be satisfied it was made. In fact, I was ultimately satisfied that the asserted payment was not made and that Mr Ghiasvand Jnr’s evidence about it was dishonest.
The reason all of this is relevant is that an examination of the content of the plaintiff and third party’s witness statements in reply, served in the fortnight before the hearing, shows that, in large part, they were directed towards responding to factual assertions contained in the defendants’ witness statements which variously were not raised at all at the hearing, were ultimately inconsistent with the case of the defendants at the hearing, were abandoned part way through the hearing, and/or were found by me to have been demonstrably false.
In addition, the request for disclosure of phone records appears to have gone nowhere. No attempt was made by the defendants to tender any phone records. Ultimately, as I have noted, the defendants ran a positive case that the first contact which Mr Kehrig and Mr Shahbaz had with each other was during phone calls on 12 July 2021. This was a radical departure from the content of the statement of Mr Masoumi and also a significant departure from the statements of each of the defendants and Mr Ghiasvand Snr.
Conclusion
In the circumstances of this case, it was appropriate for the plaintiff and third party to obtain and serve additional witness statements in reply. Given the controversial nature of what was contained in the defendants’ witness statements, it was desirable for the plaintiff and third party to put the defendants and the court on notice that those matters would be hotly contested. Inevitably, the obtaining of such statements (e.g. from Ms Nazemi, who by the time of the hearing had moved interstate) took time.
Nevertheless, the plaintiff and third party should have served the additional statements, without prompting by the court, in January or February 2024, not in the fortnight immediately prior to the hearing.
More fundamentally, the plaintiff and third party should have provided proper disclosure of the sought-after phone and bank records at a much earlier date. As counsel for the plaintiff and third party ultimately conceded, the phone records were discoverable having regard to the case (at that time) being advanced by the defendants. Notably, the plaintiff itself had sought discovery of equivalent material. The failures by the plaintiff and third party to provide timely discovery, and the related engagement in obstructive correspondence, involved breaches both of the relevant provisions of the Court Procedure Rules 2006 (ACT) and of the duty of the plaintiff and third party, imposed by s 5A(4) of the Court Procedures Act 2005 (ACT), to assist the court to achieve the main purpose and objectives of the civil procedure provisions.
On the other hand, as I have indicated above, a major – if not the major – purpose of the witness statements served by the plaintiff and third party in reply was to respond to the contentious factual assertions in the defendants’ witness statements, many of which were not raised at all at the hearing, were inconsistent with the case run by the defendants at the hearing, were abandoned part way through the hearing, and/or were found by me to have been demonstrably false.
It goes without saying that a party should not be put to the trouble and expense of responding to frivolous, scandalous, and/or dishonest factual assertions: cf. Pham v Enterprise ICT Pty Ltd (No 2) [2017] NSWSC 583 per Pembroke J at [9]. To some extent at least, it was the making of these assertions in the first place which led to a situation where the original hearing dates had to be vacated.
It follows that some blame can be attributed on both sides for the necessity to vacate the original hearing dates. Costs are at the discretion of the Court. In the result, the appropriate order is that the costs of and relating to the vacation of the original hearing dates be costs in the cause. The defendants’ application for their costs to be paid on a solicitor and client basis from 10 October 2023 is refused.
Orders
The orders of the Court are:
1.The costs of and relating to the vacation of the original hearing dates (2-5 April 2024) are to be costs in the cause.
| I certify that the preceding [28] numbered paragraphs are a true copy of the Reasons for Decision of his Honour Special Magistrate Hassall. Associate: C Ammett Date: 18 October 2024 |
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