Vakiloroaya v Norri

Category: Principal judgment

Parties: Vahid Vakiloroaya (Plaintiff)
Leila Norri (Defendant

Representation: Counsel:
A Kaufmann (Plaintiff)
M E Parker (Defendant)
Solicitors:
Stanford Lawyers (Plaintiff)
David Leamey Solicitor & Barrister (Defendant)

File Number(s): 2024/00255498

Publication restriction: Nil

JUDGMENT

1. This judgment involves an appeal from a decision of the Local Court.

2. The plaintiff is Vahid Vakiloroaya (Vakiloroaya). He is represented by A Kaufmann of counsel. The Defendant is Leila Norri (Norri). She is represented by M E Parker of counsel. The parties relied on an agreed court book consisting of 6 volumes marked as Exhibit A.

3. For convenience of understanding and without intending any disrespect, I shall refer to the parties by name.

Background

4. This appeal concerns the whole of the decision made by Magistrate Brender (the Magistrate) of the Local Court. This appeal is brought pursuant to ss 39–41 of the Local Court Act 2007 (NSW) on grounds which involve questions of law and/or mixed law and fact and the interlocutory judgment or orders that seek leave to bring the appeal.

5. The parties have a protracted history of acrimonious litigation.

The Proceedings in the Local Court

6. The starting point is the pleading framework. I will briefly set it out here.

7. On 19 February 2021, Vakiloroaya filed the Statement of Claim in the Local Court of New South Wales seeking recovery of $30,000 allegedly lent to Norri on 13 July 2018.

8. On 1 December 2021, Norri filed a further amended defence. She denied that she had entered into the loan agreement, or that the money had been advanced to her as recorded in the loan agreement. She alleged that the loan agreement had been forged (the Magistrate made no findings as to the forgery).

9. These proceedings were heard by the Magistrate over three days on 30 September 2022, 31 May 2023 and 26 February 2024.

10. On 14 June 2024, the Magistrate delivered written reasons (the Judgment) and indicated that the claim would be dismissed. Orders were made for the filing and serving of submissions on costs with the matter listed for decision on 11 July 2024.

11. On 11 July 2024, judgment was entered in favour of Norri and the Magistrate ordered Vakiloroaya to pay Norri’s costs on the ordinary basis to be assessed by the Magistrate as a lump sum.

12. On 20 September 2024, the Magistrate gave written reasons for declining to make a lump sum costs order and ordered Vakiloroaya to pay Norri’s costs on the ordinary basis as agreed or assessed.

The Further Amended Summons Seeking Leave to Appeal

13. On 11 April 2025, Vakiloroaya filed a further amended summons seeking leave to appeal.

14. By way of the further amended summons, Vakiloroaya seeks the following orders:

15. To the extent necessary, leave to appeal from the whole of the decision below;

16. Appeal allowed; and

17. Judgment of the Magistrate of the Local Court dated 14 June 2024, and the orders made 11 July 2024, and 20 September 2024 in relation to costs, be set aside and in lieu thereof order judgment in favour of Vakiloroaya or, alternatively, that the matter be remitted to the Local Court to be decided in accordance with the law.

18. Vakiloroaya appeals on five grounds. They are:

19. The Magistrate erred by taking into account irrelevant considerations, being relevantly (Irrelevant consideration):

(a) There existed an opportunity to create a false document or false signature which was unable to be adequately tested because Vakiloroaya disposed of his computer and did not retain the original document, as well as the matters which underpinned that finding; and/or (b) There is no original verifiable receipt or agreement.

2. The Magistrate erred by failing to give proper weight to certain evidence, being relevantly (Weight given to evidence):

(a) The loan agreement; (b) Admissions made by Norri to Vakiloroaya’s former wife; (c) The expert evidence; and (d) Evidence of payment by Mr Mina to Vakiloroaya.

3. The Magistrate erred by failing to draw the proper inferences of fact, in respect of (Inference of fact):

(a) The loan agreement; (b) The computer system clocks; and (c) The assessment of Vakiloroaya’s evidence.

4. The Magistrate erred by finding facts without supporting evidence and/ or contrary to the evidence, in respect of (No probative evidence):

(a) The evidence of Ms Khatibi; and (b) Norri’s evidence.

5. The Magistrate erred by failing to admit evidence and accord procedural fairness in respect of evidence relevant to the receipt of cash from Mr Mina (Procedural fairness).

The Law

16. Sections 39, 40 and 41 of the Local Court Act relevantly read:

39 Appeals as of right

(1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law.

…

40 Appeals requiring leave

(1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court.

(2) A party to proceedings before the Court sitting in its General Division who is dissatisfied with any of the following judgments or orders of the Court may appeal to the Supreme Court, but only by leave of the Supreme Court--

(a) an interlocutory judgment or order,

…

41 Determination of appeals

(1) The Supreme Court may determine an appeal made under section 39 (1) or 40--

(a) by varying the terms of the judgment or order, or

(b) by setting aside the judgment or order, or

(c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions, or

(d) by dismissing the appeal.

…

17. These grounds of appeal above overlap to some extent.

The Decision of the Magistrate dated 20 September 2024

18. The reasons for dismissing Vakiloroaya’s claim were set out by the Magistrate in the decision under the heading 'Consideration' at [31]-[52].

“[31] The plaintiff bears an onus to the civil standard as to the existence of the loan. The defendant denied the loan. She went on to allege that the agreement particularised was forged or otherwise dishonestly created. Despite that allegation, what Brereton J said in Burnside remains true, namely that "a defendant’s failure to prove fraud on the balance of probabilities, and a fortiori to the Briginshaw standard, does not mean that the plaintiff's case must succeed, but only that Norri has not satisfied the Court that Vakiloroaya has engaged in fraud [Purkess v Crittenden (1965) 114 CLR 164, 167-8]. The defendant must still prove its case to the requisite standard."

[32] In deciding that last question (whether the plaintiff has proved its case), I must bear in mind that part of the plaintiff’s case is that he has a document signed by the defendant apparently evidencing the loan, and the defendant says that is a false document. Evidence about the legitimacy of that document is an important matter to be taken into account in assessing whether the plaintiff has discharged the onus. The defendant assumed the evidential burden referred to by Hallen J in Miles v Amos, by leading evidence seeking to cast doubt on the plaintiff’s evidence.

[33] The fact the defence may not have met the Briginshaw standard in seeking to prove that the document is a forgery or fraud does not determine the outcome. The test is different — has the plaintiff proved on all the evidence, including evidence concerning the document, that the loan was made? The defendant does not need to prove anything to succeed on that issue if I am not satisfied (ie have a real persuasion) that the loan was made.

[34] That assessment will involve an analysis of the evidence about the document proffered as proof of the loan. But it will also involve considering other features such as the parties' evidence about the source of the cash, the rationale for the loan and the parties' assertions and responses to other alleged matters of detail about the events said to surround the transaction. In many ways the case is "one on one". The partners of the parties were not present at the alleged transaction and had limited knowledge about its existence.

[35] The plaintiff’s case was put initially on oath in May 2021 that he went to the bank and the money was withdrawn in cash, he put it in an envelope and shortly afterwards the defendant arrived (exh 1, para 8). This was repeated a year later and further detail given (exh 2, para 20 "I left my home mid morning to go to the bank"). In May 2023 he admitted to an error and said the money came from a box containing cash (exh 9, para 30). That was a big mistake to have made. It was corrected only after the subpoena to the bank was answered which objectively showed the earlier evidence to have been incorrect.

[36] The explanation was that he was preoccupied by other litigation, civil and criminal. That explanation was criticised by reference to the fact that there was no evidence as to what was going on in those other cases when exhibit 1 was prepared. He had 12 months to re-consider its accuracy yet "doubled down" in exhibit 2. As to exhibit 2, the defendant submitted with some force that:

“…the Plaintiff conceded that the criminal proceeding had been received 12 days before he filed his affidavit but stated that his mind was still "affected": 26/02/24 T. 42:50. The long list of tasks the Plaintiff claims he was undertaking in May 2022 at paragraph [57] of Exhibit 9 (supplemented at 26/02/2024 T.43:28-40) are also not supported by documentary evidence. Why the review of the Police brief in the criminal proceeding in which judgement had just been reserved was necessarily is not explained, nor is the delay in preparing a response to an affidavit that was, on the Plaintiff’s evidence, filed on 23 April 2021: Exhibit 9 [57]. The Plaintiff was aware of the possibility of seeking an extension to file evidence: 26/02/24 T 14-16. In any event, the Plaintiff’s distraction by another proceeding he had commenced against the Defendant’s husband (26/02/24 T.43:45) is not an acceptable reason for a delay of over 7 months to correct his own evidence: cf 26/02/24 T.47:48-49."

[37] The substituted explanation as to the source of the cash was contested. The evidence of the plaintiff was that "as at" 13 July he had received $35,000 in cash from Mr Mina which he kept in a box at home, and on 12 July he received a further $50,000 electronically. He had no documents detailing the receipt of the $35,000, or the alleged balance of $15,000 also said to have been paid in cash at some stage so as to total $100,000 paid for a 10pc share in a company.

[38] The receipt of the $35,000 was not corroborated by the plaintiff’s former wife who did not know about any cash from Mr Mina or how much was in the home box.

[39] Mr Mina did not say how much he had given the plaintiff by the 13 July. In chief he agreed to the suggestion that he paid $50,000 in cash sometime between February and August.

[40] The plaintiff did not record the dates of the payments either. It would be expected that in a business transaction in which $100,000 was being paid for a shareholding, that any cash payments would be recorded as to dates and amounts by the payer (who was an accountant), or the payee.

[41] I find Ms [Khatibi's] evidence of limited assistance. It was served very late without explanation and after the defendant’s evidence was served. It was prepared many years after the event yet claimed to recollect some events with great specificity. She claimed that she saw the defendant write her name many times as Torabi at the club but that was not verified by documents which would likely exist. That evidence may be explicable as a reference to her signature (which translated as Torabi), particularly as it seems otherwise unlikely to be true at least after she changed her name to [Norri].

[42] She said she was told about the loan by the defendant and then told her husband (exh 7 para 38). This is inconsistent with evidence of both the plaintiff and defendant. The defendant denied that she told Ms [Khatibi] about the loan. The plaintiff denied telling Ms [Khatibi] about the loan until just before May 2021 (and didn't suggest that she disclosed to him that she was aware of it, at any time). And her evidence that she told her husband was then contradicted by her evidence that she didn't discuss it with him until 2022 (31.5.2023 164).

[43] The plaintiff’s evidence in cross examination at 26.2.2024 at T25 was that he received the $100,000 from Mr Mina in instalments. The thrust of the evidence was that he got tranches adding up to about $35,000 in the months February to April 2018, then the $50,000 by cheque and then the final $15,000 (incorrectly recorded as $50000) in about August. If that was so, and he had the money readily available, that would be inconsistent with his earlier evidence that he said "I may be able to lend you $30,000 in about 2 weeks" (exh 1 para 5) and that on 9 July he received payment for a work project.

[44] His explanation as to why he did not keep the original loan agreement was unconvincing — namely that on request he gave the borrower the original. The plaintiff is an intelligent man. He is a lecturer and engineer/inventor. It is the lender who would have the obvious interest in keeping the original for evidentiary purposes.

[45] The signature is one that would be relatively easily copied by hand as it is quite simple. Equally, it could have been "cut and pasted" by a programme like photoshop. The signature and software were available to the plaintiff.

[46] As discussed, the plaintiff bears the onus. I take into account in deciding whether I am satisfied that the onus has been discharged that the plaintiff had the opportunity and means to have prepared a false document. The fact the computer has been said to have been disposed of and the original agreement no longer in the plaintiff’s possession means there can be no certainty either way. I can also take into account the plaintiff’s possible motivation to have done that, being the entrenched dispute the parties were in and his view that "the family" had caused his criminal troubles as well as stealing $100,000 (T41), in deciding the probabilities. These are matters making a false debt claim plausible.

[47] The expert evidence that the original word document was probably created on 12 July, and a signed version scanned on 13 July (in each case according to the clock on the computer used) does not tell one whether it was signed by the defendant. I have taken into account that the clocks could have been unreliable. I also have taken into account that it would have been a highly planned thing to do to create a forgery of this kind on 12 and 13 July 2018 and then wait to 2021 to sue upon it. Or to have created the forgery by backdating a computer's clocks. Ultimately the expert evidence does not take the matter far — it doesn't destroy either case theory.

[48] On a matter of detail, the plaintiff said he met the defendant on 13 July and didn't mention her children. He then said in reply they weren't present. She had a 1 and 4 year old. There was evidence the 4 year old was not in day care that day. While it's possible someone else was looking after them, I accept as likely her evidence she had the children that day and met the plaintiff’s wife that day and that assists her to recollect that she didn't meet the plaintiff as alleged.

[49] If the plaintiff and defendant met as alleged on 13 July, and the other contacts occurred as alleged by the plaintiff, one might expect some electronic record of some communication between them, or of some movement showing them being in the same vicinity. That absence assists the defendant’s denials.

[50] I have considered the following in combination:

A the claim about a one year loan in 2018 arose in 2021 in the context of other criminal and civil cases and a falling out between the families,

B the first sworn version of events was wrong on important matters concerning verifiable details and not corrected until after it was apparent it could be disproved

C there was no written nor alleged oral reminder nor claim for repayment when the term expired (he did allege an oral reminder before expiry)

D it was not the subject of any contemporaneous emails or other communications, including any phone records of them communicating

E there is no written record of the date of the receipt of the cash said to have been used to lend the money,

F there is no original verifiable receipt or agreement

G there existed opportunity to create a false document or false signature, which was unable to be adequately tested because the plaintiff disposed of his computer and did not retain the original document

H there is no evidence of apparent use of the loan money by the defendant, nor of any apparent need for money other than the alleged desire to seek legal advice

[51] When people choose to lend, pay or repay large amounts in cash, deliberately or otherwise it makes it more difficult to prove transactions than using conventional electronic means. This can have the effect that the party with the onus may fail - those lending as well as those choosing to pay or repay by cash may face that difficulty.

[52] Weighing all these matters, I am not satisfied on the balance of probabilities that the plaintiff loaned the defendant $30,000 in July 2018 as alleged. The claim will be dismissed[.]”

19. The Magistrate correctly identified the principles to be applied in deciding whether Vakiloroaya had discharged his onus, at [31]-[34] of the Judgment.

20. The Magistrate set out at [35]-[51] of the Judgment the matters that were weighed in reaching the conclusion at [52] that his Honour was not satisfied on the balance of probabilities that Vakiloroaya loaned Norri $30,000 in July 2018 as alleged.

21. Importantly, his Honour identified the key findings at [50] of the Judgment, which were considered in combination, in reaching the Court's ultimate conclusion that the claim should be dismissed.

22. In essence, this decision is based mainly upon factual findings as there is little by way of documentary evidence.

Leave to Appeal

23. The parties relied on many decisions in relation to leave to appeal. I will first set out some of the authorities adduced and I will then deal with the remainder as they arise in the pleadings.

The Law

24. In BHP Billiton Ltd v Dunning [2013] NSWCA 421 the Court of Appeal set out the following principles with respect to a grant to leave to appeal:

“Principles relevant to leave applications

[19] In order to be granted leave to appeal, the applicant must demonstrate something more than that the Magistrate was arguably wrong in the conclusion arrived at: Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69 per Sheller JA; Zelden v Sewell [2011] NSWCA 56 at [22] per Campbell JA (Young JA agreeing).

[20] Ordinarily it is appropriate to grant leave to appeal only in matters that involve issues of principle, questions of public importance or an injustice which is reasonably clear, in the sense of going beyond merely what is arguable: Carolan per Kirby P; Jaycar Pty Ltd v Lombardo [2011] NSWCAS 284, Campbell JA (Young and Meagher JJA agreeing) at [46]. See also Lee v New South Wales Crime Commission [2012] NSWCA 276 per Bathurst CJ (Macfarlan and Barrett JJA agreeing).”

25. In Makowska v St George Community Housing Limited [2025] NSWCA 61, the Court of Appeal further illustrated the principles in relation to a grant to leave to appeal:

“[7] This application for leave to appeal must thus be approached by reference not only to the principle that leave will ordinarily only be granted when the proposed appeal raises an issue of principle, a question of public importance, or seeks to address a reasonably clear injustice going beyond something that is merely arguable: Be Financial at [32]-[38]; Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28], but also with “added restraint”.”

26. An error in point of law may include (US Manufacturing Co Pty Ltd v ABB Service Pty Ltd [2008] NSWSC 705 at [54] per Hall J) (US Manufacturing):

27. a finding made where there is no evidence to support it or one that draws an inference from facts that cannot be reasonably drawn;

28. a finding that no person acting judicially and properly instructed as to the relevant law could have made; and/or

29. where a Court has misdirected itself in law.

30. A judgment must be read as a whole. Appropriate allowance should be made for the pressures under which magistrates are placed by the volume of cases coming before them (Director of Public Prosecutions (NSW) v Illawarra Cashmart Ply Ltd (2006) 67 NSWLR 402 at 407–408; [2006] NSWSC 343 at [15]–[18]; see also Madden's Stable Bedding Pty Ltd v Reid [2014] NSWSC 554 at [32] per Button J).

31. In the well-known case Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Kirby J at 149 picked up with approval the article of CT Emery and B Smythe, ‘Error of Law in Administrative Law’ (1984) 100 LQR 612 where it was said that there are three stages typically followed in the decision of a court: (1) fact-finding; (2) rule-stating; (3) rule application. Kirby J’s treatment here has been quoted with approval in Fortune Food Manufacturer Pty Ltd v K Young Trading Pty Ltd [2010] NSWSC 407 at [26] and in DJ & LJ Norman Pty Ltd v Sheather [2022] NSWSC 1299 at [71]).

Appeal Ground 1 – Irrelevant Considerations

29. Vakiloroaya submits that it is apparent from [50] of the Judgment that the Magistrate took into account a number of irrelevant considerations as follows.

Ground 1(a) — the "opportunity" to create a false document or signature

Vakiloroaya’s submissions

30. Leaving aside for the moment the appropriateness of the Court making such a finding, that was one of the findings that his Honour considered, in combination with others, in concluding that Vakiloroaya had not discharged his onus in satisfying the Court on the balance of probabilities that he loaned Norri $30,000.

31. At this point that his Honour, quite properly with respect, did not make any finding that Vakiloroaya created a false document, in the form of the loan agreement, or that Vakiloroaya placed a false signature on, the loan agreement.

32. It is also worth noting that the opportunity to create a false document or false signature exists in respect of every document. In fact, numerous documents have been adduced into evidence before courts where, in each case, that same opportunity existed. Accordingly, the existence of an opportunity to create a false document or false signature was an entirely irrelevant consideration.

33. The Magistrate fell into error by taking that consideration into account and allowing it to affect his determination such that the Judgement ought to be set aside.

34. In making the finding that there existed an opportunity to create a false document or signature, the Magistrate took into account further irrelevant considerations at [45]-[47] of the Judgment as follows:

35. Norri's signature on the loan agreement "is one that would be relatively easily copied by hand as it is quite simple". Vakiloroaya submitted that there being no finding that Norri's signature was copied by hand, being the only way in which Norri’s fraud assertion was put at hearing, leaving aside for now the correctness or evidentiary basis for it, was irrelevant to determining whether, on the balance of probabilities, the plaintiff had discharged its onus in respect of the loan agreement. It amounted to speculation by the Court as to what could have occurred (i.e, a serious fraud) absent any finding that it actually did occur. Vakiloroaya further submitted in oral submissions that it was an evaluative finding requiring expertise. Since there was no such expert evidence before his Honour, his Honour erred in law in making that finding;

36. Norri’s signature "[e]qually. . .could have been 'cut and pasted' by a programme like photoshop. The signature and software were available to the plaintiff ”. Vakiloroaya submitted that any fraud allegation involving cutting or copying and pasting was disavowed by Norri. Accordingly, this was an irrelevant consideration, once again amounting to speculation about what could have occurred, in this case where such serious allegation were not even made by Norri;

37. despite finding that there can be "no certainty either way", Vakiloroaya's "possible motivation" to have created a false document "making a false debt claim plausible" was an irrelevant matter, particularly where there was no such serious finding;

38. the clocks on Vakiloroayas computer "could have been unreliable". Once again, this was an irrelevant speculative consideration, particularly absent any finding that Vakiloroaya engaged in any fraud; and

39. "it would have been a highly planned thing to do to create a forgery of this kind on 12 and 13 July 2018 and then wait to 2021 to sue upon it. Or to have created the forgery by backdating the computer's clocks", which amounts to a finding that certain things (of which there is no evidence and no findings that they actually occured) would have been highly planned. Once again, this amounts to speculation about hypothetical considerations that are irrelevant to whether Vakiloroaya discharged his onus.

Norri’s submissions

35. In deciding whether Vakiloroaya had discharged its onus at first instance, the Magistrate took into account whether Vakiloroaya had the opportunity and means to prepare a false document at [46] of the Judgment. This consideration was expressly part of His Honour's consideration of whether Vakiloroaya had discharged its onus. As identified in the Magistrate's reasons, Vakiloroaya had to prove on all the evidence, including the purported loan agreement, that the loan was made before any onus arose on Norri at [33] of the Judgment).

36. The fact that the Magistrate did not find the purported loan agreement to be a "false document" does not render the document what it purports to be. That would be an inversion of the onus on Vakiloroaya. In other words, Vakiloroaya does not succeed in establishing a document is authentic because there is no finding that it is inauthentic. In any event, the Magistrate made a specific finding about the purported loan agreement. His Honour found there could be "no certainty" about the document at [46] of the Judgment.

37. One basis of the alleged irrelevance of the considerations is that the opportunity to create a false document or false signature exists in respect of every document. Why that makes the consideration irrelevant is not self-evident. It is not disputed Norri denied signing the document at [7] of the Judgment. In those circumstances, it was relevant to consider how the document may have come into existence in determining whether it could support Vakiloroaya’s claim.

38. The hypothetical considerations in [32] of Vakiloroaya's submissions are each alleged to be irrelevant because there was no finding that the hypothetical occurred. Again, Vakiloroaya appears to contend that in the absence of proof of the negative (e.g. a forged signature), the Court could only conclude the corresponding positive (e.g. the signature was genuine) or, at least, that any other potential explanation for the positive is irrelevant. For the same reasons as described above, that involves an inversion of the onus.

39. It was entirely appropriate for the Magistrate to identify why he did not consider the purported loan agreement supported Vakiloroaya’s claim including because the alleged signature of Norri could have been copied by hand or "cut and pasted" and the clocks on Vakiloroaya’s computer could have been unreliable at [45] and [47] of the Judgment. As part of this consideration, His Honour identified a potential motivation for the creation of a false document and signature but then acknowledged that it would be "highly planned" at [46]-[47] of the Judgment. Ultimately, no finding was made about Vakiloroaya’s motivation. What Vakiloroaya identifies as "speculation" is, in fact, an elaboration of the Magistrate's reasons for the finding that there was "no certainty" about the purported loan agreement.

Ground 1(b) — no original receipt or agreement

Vakiloroaya’s submissions

40. The Magistrate recorded this finding at [50F]. It appears that his Honour was here, in effect, referring to there being no original loan agreement, and therefore no original receipt, as the loan agreement itself recorded the receipt of $30,000.

41. Putting to one side for the moment the correctness of his Honour's finding that the loan agreement itself was not verifiable and noting again that his Honour did not find that the loan agreement was fraudulently created, the fact of there being no original was irrelevant.

42. Copies of documents are frequently adduced into evidence and there is no requirement to keep, or produce to the Court, an original of a document in order for Vakiloroaya to discharge his onus. Consequently, the absence of an original receipt or loan agreement was an irrelevant consideration that ought not to have been taken into account by the Magistrate.

43. Taking that consideration into account, and allowing it to affect the Court's determination, was a further error, by reason of which the Judgment ought to be set aside.

44. Taking into account an irrelevant consideration constitutes appealable error (Avon Downs Proprietary Limited v Federal Commissioner of Taxation (1949) 78 CLR 353 per Dixon J). If a judicial officer allows extraneous or irrelevant matters to guide or affect them, then their determination should be reviewed (House v The King (1936) 55 CLR 499; [1936] HCA 40 per Dixon, Evatt and McTiernan JJ referred to in Sydney Automotive Paints & Equipment Pty Ltd v Grant Lee Thomas [2011] NSWSC 1454 at [47]-[48] per Harrison AsJ (‘Sydney Automotive Paints’)).

45. In the oral submissions, Vakiloroaya submitted that taking into account irrelevant considerations was an error of law. Since the irrelevant considerations should not be taken, the ultimate finding at [52] was a finding that “no personal acting judicially and properly instructed as to the relevant law could have made” (US Manufacturing at [54]).

46. To the extent that this ground identifies errors of mixed law and fact, the leave should be granted because, despite the proportionality issue of costs being more than the amount claimed on any view in this proceeding, it would be manifestly unjust for a decision to stand based on irrelevant considerations which clearly exercised his Honour’s mind in arriving at his Judgment.

Norri’s submissions

47. There is no dispute that there is no original version of the purported loan agreement. The absence of a requirement for an original document to prove a claim does not make its absence an irrelevant consideration. The non-existence of the original version of the purported loan agreement was one of many reasons that the Magistrate was not satisfied on the balance of probabilities that the loan had been advanced as alleged. For those reasons, Vakiloroaya has not established that the considerations were irrelevant, and the ground should fail.

48. In the oral submissions, Norri further submitted that the absence of an original agreement is at least relevant in respect of the expert evidence which was requested by Norri to determine the genuineness of the loan agreement, so it could not be an irrelevant consideration.

Resolution

49. This proceeding is not like the one in Sydney Automotive Paints where the Magistrate took into account an irrelevant consideration when deciding the proper interpretation of a guarantee (the ultimate issue in dispute). Her Honor took into account the subjective intention of the defendant when interpreting the guarantee.

50. In this case, the Magistrate was entitled to make the finding of fact in [50] of the Judgment. In my view, they are not irrelevant considerations. The Magistrate acknowledges that Mr Vakiloroaya’s explanation that the original copy of the purported loan agreement was not available for the expert evidence because Vakiloroaya had not kept a physical copy of it was unconvincing. Without the original document and original signature on it, the expert’s evidence was inconclusive. Further in any event, His Honour is entitled to make such a finding. The Magistrate stated at [47] of the Judgment that the expert evidence that pertained to the purported copy of the loan agreement did not take the matter any further as “it doesn’t destroy either case theory”.

51. It was based on the combination of the facts in [50] of the Judgment that the Magistrate was not satisfied on the balance of probabilities that Vakiloroaya loaned Norri $30,000 in July 2018. In these circumstances, the considerations by which he arrived at his decision were relevant.

52. Therefore, Appeal Ground 1 fails.

Appeal Ground 2 – Weight given to evidence

53. The Magistrate correctly identified the relevant ‘test’ at [33] of the Judgment as follows: "has Vakiloroaya proved on all the evidence, including evidence concerning the document, that the loan was made?"

Ground 2(a) — no proper weight given the purported loan agreement

Vakiloroaya’s submissions

54. The Magistrate fell into error, though, by not giving proper weight, or indeed any weight at all, to the key document in the case (i.e. the loan agreement) in finding that Vakiloroaya had not discharged his onus.

55. As identified above, the matters weighed by the Court were set out at [35]-[51] of the Judgment. Nowhere in those paragraphs did the Magistrate suggest that he gave any weight at all to the loan agreement.

56. That key document was critical to the case: it contained an admission by Norri of having received the loan amount in cash on the day Vakiloroaya said that he gave it to her, as well as an agreement that the loan would be repaid within a year (at [4] of the Judgment). Although Norri denied that she signed that document, she accepted that it appeared to contain her signature and the Magistrate made no finding at all that the document was false or fraudulently created.

57. Despite its importance, the Magistrate only made reference to the loan agreement at [44]-[47] of the Judgment for the purposes of:

58. finding Vakiloroaya’s explanation as to why he did not keep the original loan agreement to be "unconvincing", on a basis that is with respect difficult to understand. Vakiloroaya’s explanation was that he gave the original loan agreement to Norri at her request and had, on his evidence, already scanned and saved a signed copy of it on his then computer — in other words he already had an electronic file so it does not follow that there would be any need to keep the original for evidentiary purposes; and

59. in effect, speculating that it could have been fraudulently prepared, but with respect, without ever making the serious finding that it actually was.

60. The loan agreement ought to have been given far greater weight by the Court than any of the matters set out at [50] of the Judgment.

61. By not giving the loan agreement proper, or any, weight the Magistrate fell into error.

Norri’s submissions

60. There is no doubt that the Magistrate considered whether the purported loan agreement supported Vakiloroaya's claim. His Honour expressly stated that he must "bear in mind that part of Vakiloroaya's case is that he has a document signed by Norri apparently evidencing the loan" at [32] of the Judgment. In identifying the question to be answered, the Magistrate asked if Vakiloroaya had "proved on all of the evidence, including evidence concerning the document, that the loan was made?" at [33] of the Judgment. The assessment to be undertaken to answer that question involved "an analysis of the evidence about the document proffered as proof of the loan" at [34] of the Judgment.

61. The Magistrate found there was no certainty about the purported loan agreement for the reasons identified at [44]-[47] of the Judgment. The fact that the document would, if genuine, support Vakiloroaya's claim does not mean it automatically attracts greater weight. A finding of fact cannot be disturbed "if the facts inferred by the [Primary Judge], upon which the finding is based, are capable of supporting its finding, and there is evidence capable of supporting its inferences" (Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126, 138 (Jordan CJ)). Other than repeating the complaint about the alleged "speculation" at (which was addressed in Ground 1) and disagreeing with the Magistrate's assessment of Vakiloroaya's evidence as "unconvincing", Vakiloroaya has not identified any basis on which to disturb the Magistrate's finding of the weight given to the purported loan agreement.

Ground 2(b) — no proper weight given to admissions made by Norri to Ms Khatibi

Vakiloroaya’s submissions

62. The Magistrate found at [41] of the Judgment that Ms Khatibi's evidence was "of limited assistance", in circumstances where his Honour at [42] incorrectly found there to be inconstancies in her evidence with the evidence of both Vakiloroaya and Norri.

63. At no stage though did his Honour find Ms Khatibi was not a witness of credit. In those circumstances, his Honour ought to have given considerable weight to her evidence, particularly where it included a number of key admissions by Norri: (1) Vakiloroaya advanced the loan to Norri; (2) the loan was to be used for legal advice because of Norri’s concerns about how her husband had obtained citizenship in Australia; (3) Norri requested Ms Khatibi to keep the loan a secret. Ms Khatibi's evidence ought to have been of far more than “limited assistance” to the Court. No aspect of it was rejected, yet it contained critical and highly probative evidence.

64. All these matters were consistent with Vakiloroaya's evidence, and inconsistent with Norri’s. That evidence ought to have weighed heavily in the Court concluding that Vakiloroaya had discharged his onus.

65. In oral submissions, Vakiloroaya further submitted that it was a clear error of law. But to the extent this ground involves errors of mixed fact and law, given Ms Khatibi’s evidence of key admissions corroborating Vakiloroaya’s evidence where his Honour did not, at any point, reject her critical evidence, leave should plainly be granted to avoid an obvious miscarriage of justice if the Judgment were not set aside.

Norri’s submissions

66. Vakiloroaya complains that the Magistrate failed to give proper weight to Ms Khatibi's evidence because of "incorrect" inconsistencies detailed in Ground 4. It is convenient, therefore, to deal with that "incorrect" inconsistency detailed first.

67. Despite in Vakiloroaya’s submissions referring to "inconsistencies in [Ms Khatibi's] evidence with the evidence of both Vakiloroaya and Norri (incorrectly...)", Vakiloroaya does not appear to contend there was any error in finding that Ms Khatibi's evidence was inconsistent with Norri's evidence.

68. The Magistrate made a finding that Ms Khatibi's evidence at par 38 of her affidavit was inconsistent with Vakiloroaya’s evidence at [25] and [42] of the Judgment. Norri acknowledged that his Honour appears to have overlooked the fact that after Ms Khatibi gave evidence about when she disclosed her knowledge of the loan to Vakiloroaya in October or November 2022, she then clarified that Vakiloroaya had first mentioned the loan to her in February to March 2021, at which time she revealed no knowledge of the loan. The timing of Ms Khatibi's disclosure to Vakiloroaya was not clearly identified in [38] of her affidavit especially noting that [28]–[29] and [31]–[37] of Ms Khatibi's affidavit were not admitted into evidence.

69. To the extent there was any error by the Magistrate, it is not a material error of fact that gives rise to any error of law (Sayar v Health Care Complaints Commission [2024] NSWSC 418 (Campbell J) at [19]-[22] citing Fisher v Nonconformist Pty Ltd (2024) 114 NSWLR 1 [50] (Kirk JA, Meagher JA and Simpson AJA agreeing)).

70. Ms Khatibi's evidence about when she told her husband of her knowledge of the loan is of peripheral relevance. By way of background, Ms Khatibi's affidavit was filed on 19 May 2023. Her evidence is that her affidavit was prepared on 13 May 2023. Ms Khatibi could not remember when (including the year) she was asked to prepare her affidavit. The affidavit was filed shortly before the second day of the hearing of the proceeding on 31 May 2023 and over two years after Vakiloroaya's evidence in chief was filed at [24] of the Judgment.

71. Ms Khatibi's evidence about her communication of her knowledge of the loan to Vakiloroaya only goes to the reason for the delay in the filing of the evidence. Ms Khatibi's evidence only corroborates Vakiloroaya's evidence. As the Magistrate identified, the partners of the parties were not present at the alleged transaction and had limited knowledge of its existence (at [34] of the Judgment). Most importantly, the inconsistency of Vakiloroaya’s evidence with Ms Khatibi's evidence was only one of many reasons why the Magistrate found Ms Khatibi's evidence of "limited assistance". The others were the delay, lack of explanation for the delay, the specificity of her recollection in 2023 of a conversation from 2018 and the inconsistency of her evidence with Norri's evidence (at [41]-[42] of the Judgment). In all of those circumstances, there is no "realistic possibility that the decision that was made in fact could have been different if the error had not occurred" (LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs & Anor (2024) 98 ALJR 610; [2024] HCA 12 at [7] (Gageler CJ, Gordon, Edelman, Steward, Gleeson and Jagot JJ).

72. The crux of Vakiloroaya's argument is, again, that because the evidence, if accepted at its highest, would be consistent with Vakiloroaya's claim, the Magistrate failed to give it sufficient weight.

73. The Magistrate summarised and then considered Ms Khatibi's evidence at [23]-[25] and [41]-[42] of the Judgment. It can be readily inferred that the conclusion that the evidence was of "limited assistance" was, in addition to the matters identified at [41]-[42] of the Judgment informed by the reasons at [23]-[25] of the Judgment. Those reasons include a description of the alleged admission by Norri (at [23] of the Judgment). In respect of that alleged admission, the Magistrate explained, as part of the reason he found it of limited assistance, that it was prepared many years after the event but was recalled in "great specificity" at [41] of the Judgment. There is no question that the Magistrate considered the salient parts of Ms Khatibi's evidence.

74. It is accurate that the Magistrate made no adverse credibility finding about Ms Khatibi. His Honour did not find Ms Khatibi's evidence of limited assistance for reasons of credit. Rather, he found it to be of limited utility. That is not surprising. If accepted, it merely corroborated the alleged motivation for Norri to seek the loan from Vakiloroaya (see also the Judgment at [34]). Further, as is clear in [50H], the Magistrate took into account the evidence of Norri's alleged desire to seek the loan for legal advice.

75. Other than the inconsistency with Vakiloroaya’s evidence addressed above, Vakiloroaya has identified no flaw in the reasoning given for the Magistrate's finding that Ms Khatibi's evidence was of "limited assistance". The weight given to the evidence is a question of fact which Vakiloroaya has not established ought to be interfered with by this Court.

Ground 2(c) — no proper weight given to expert evidence

Vakiloroaya’s submissions

76. The Magistrate ultimately found at [47] of the Judgment that "the expert evidence does not take the matter far — it doesn't destroy either case theory". Accordingly, his Honour in effect gave no weight to the expert evidence.

77. Vakiloroaya submits that, in failing to give any weight to expert evidence based on metadata that was entirely consistent with Vakiloroaya's case, his Honour erred.

78. Consequently, his Honour failed to give proper weight to compelling objective evidence that ought to have comfortably weighed the balance of probabilities in favour of Vakiloroaya, such that the Judgment is clearly unjust and ought to be set aside.

Norri’s submissions

79. The Magistrate described the expert evidence and then explained why he did not think it "destroyed" either party's case theory at [14]-[15] and [47] of the Judgment. It is relevant to note the expert evidence was tendered by Norri to support her case. In making the finding at [47] of the Judgment, the Magistrate did not accept it advanced Norri's case either.

80. It was a matter for the Magistrate to determine the weight given to the evidence. That is a question of fact which Vakiloroaya has not identified to be affected by any legal error.

Ground 2(d) — no proper weight given to evidence of payment by Mr Mina to Vakiloroaya

Vakiloroaya’s submissions

81. The Magistrate did not accord Mr Mina’s evidence, as it was properly recorded at [39] of the Judgment, that he had paid Vakiloroaya $50,000 in cash sometime between February and August 2018, any weight.

82. Mr Mina's evidence of course corroborated Vakiloroaya's evidence as to having received $35,000 in cash from Mr Mina by July 2018. Mr Mina's inability to recall the specific months on which he paid cash, years later, only showed the authenticity of his evidence.

83. Despite also finding at [37] of the Judgment that Vakiloroaya received a further $50,000 electronically from Mr Mina on 12 July, his Honour failed to give that incontrovertible evidence any, or any proper, weight in corroborating Vakiloroaya and Mr Mina's evidence.

84. The Magistrate failed to attribute any weight at all to the evidence of payment by Mr Mina, which was important to his ultimate findings.

Norri’s submissions

85. It is unclear on what basis Vakiloroaya alleges that the Magistrate gave no weight to Mr Mina's evidence that he gave Vakiloroaya $50,000 in cash sometime between February and August 2018. The Magistrate expressly referred to the evidence in the "Consideration" section of the reasons at [39] of the Judgment. In finding that Vakiloroaya had not satisfied the onus, His Honour identified "the lack of the written record of the receipt of the cash said to have been used to lend the money" as a consideration at [50E] of the Judgment, see also [40] of the Judgment. This demonstrated his Honour considered the evidence of the provision of the cash but gave it less weight because it was not corroborated by documentary evidence of the receipt of cash which would be expected in a transaction of that kind.

86. Vakiloroaya also says the Magistrate failed to give any proper weight to the transfer of $50,000 electronically on 12 July 2018 which was verified by Vakiloroaya’s bank statement. In his "correcting affidavit" and cross-examination, Vakiloroaya said that the money he allegedly loaned Norri came from the cash he received from Mr Mina, not the electronic transfer from Mr Mina. In those circumstances, it was entirely appropriate for the Magistrate to focus on the evidence of the provision of the cash, rather than the electronic transfer.

87. For those reasons, assuming this Court has jurisdiction to determine this ground, Vakiloroaya has failed to establish any appealable error in the weight given to the evidence.

Resolution

88. The question the Magistrate had to determine was whether Norri owed Vakiloroaya the sum of $30,000.

89. The weight that a Magistrate gives to oral evidence and written records is discretionary. As I have already mentioned, since the loan agreement was a copy, the Magistrate found that the expert evidence had a neutral effect in that it did not destroy either case theory. The Magistrate did consider the terms of the loan agreement as recorded in Norri’s submission under Appeal Ground 3. In any event, His Honour is not obliged to assign weight to every piece of evidence.

90. His Honour articulated that the reason that Ms Khatibi’s evidence was of limited assistance was due to a number of factors, namely it corroborates Mr Vakiloroaya’s evidence but she was not present when the transaction occurred; the affidavit was filed shortly before the second day of the trial which was delayed and there was a lack of explanation for the delay or the specificity of her recollection in 2023 of a conversation that took place in 2018; and her evidence was inconsistent with Norri’s evidence**.**

91. Therefore, Appeal Ground 2 fails.

Appeal Ground 3 – Inference of Fact

92. For this ground, Vakiloroaya submitted that pursuant to established legal principle the Court ought to have applied the conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a court should not lightly make a finding that a party to civil litigation has been guilty of such conduct. A finding to that effect requires satisfaction to the Briginshaw standard.

Ground 3(a) — purported loan agreement and Norri's signature

Vakiloroaya’s submissions

93. On its face, the loan agreement was a document that appeared to have been signed by Vakiloroaya and Norri (Judgment at [1]). Accordingly, in applying the principles referred to above his Honour should have found that it was signed by Norri.

94. At no stage did the Court find that the loan agreement was prepared fraudulently. Instead, the Court made findings about hypothetical possibilities as to the means by which it could have been fraudulently prepared at [45]-[47] of the Judgment.

95. In doing so, his Honour failed to apply well established principle to the facts as found in analysing the evidence. Indeed, the Judgment suggests that his Honour did in fact consider the loan agreement to be fraudulently created, without making such a serious finding. The only proper inference which should have been drawn from the loan agreement, and the finding that the signature resembled Norri's (who admitted to no independent recollection of the events of 13 July 2018) was that Norri did in fact sign it.

96. On any view, this error resulted in the Court, in effect, neutralising the most compelling documentary evidence in the case and, consequently, created a manifestly unjust outcome that ought to result in the Judgment being set aside.

Norri’s submissions

97. Vakiloroaya contends that because of the principles in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; 110 ALR 449; 67 ALJR 170 (‘Neat’), the Magistrate should have found that the purported loan agreement was signed by Norri.

98. The plurality in Neat observed at 171 that statements "to the effect that clear or cogent or strict proof is necessary 'where so serious a matter as fraud is to be found'... should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct". The relevance of that statement is not clear in circumstances where the Magistrate made no finding that any party engaged in fraud. It appears, in a repeated theme, that Vakiloroaya contends that if the Magistrate was not convinced the purported loan agreement was a fraud, it must (and the signature it contains) be accepted as genuine. As the Magistrate identified correctly at [33] of the Judgment, the failure of Norri to prove fraud does not make out Vakiloroaya’s case.

99. Vakiloroaya goes so far as to submit that the Magistrate considered the purported loan agreement to be fraudulently created without making such a finding. In circumstances where the Magistrate expressly stated the weight given to the purported loan agreement at [46] of the Judgment, that speculative assertion should be rejected.

100. The Magistrate made no specific finding about Norri's signature in the purported loan agreement. Instead, His Honour identified other explanations for its purported existence (Judgment at [45]). In light of those explanations, it is unclear why "the only proper inference" to be drawn from the purported loan agreement is that it was signed by Norri.

Ground 3(b) — computer system clocks

Vakiloroaya’s submissions

101. At [47] of the Judgment his Honour applied similar reasoning in respect the computer system clock. The leamed Magistrate found that the clock "could have been unreliable", without any evidence that it was, and expressly took into account the possibility that "the forgery" could have been created by "backdating a computer's clocks". In applying the principles referred to above, his Honour should instead have concluded that there was no evidentiary basis to find that the system clocks on the computer were unreliable, or that they had been backdated. Indeed, that was the only properly available inference.

102. Bearing in mind that the fraud allegation made by Norri related only to an alleged forgery by handwritten copying of Norri's signature, and not to any allegation of adjusting the system clock on a computer, this error was particularly unjust. Ultimately it had the effect that his Honour found that the expert evidence "does not take the matter far", in circumstances where the expert metadata evidence weighed heavily in favour of Vakiloroaya.

103. Once again, this error ought to result in the Judgment being set aside

Norri’s submissions

104. Vakiloroaya says the "only properly available inference" is that there was "no evidentiary basis to find the system clocks on the computer were unreliable or that they had been backdated".

105. The Magistrate found, on the basis of the expert evidence, that system clocks recording the date of creation of documents can be set to the wrong times (Judgment at [14]). The Magistrate did not find that any system clocks had been backdated. To the contrary, the Magistrate expressly found that the original Word document "was probably created on 12 July [2018], and a signed version scanned on 13 July [2018] (in each case according to the clock on the computer used)” (Judgment at [47]). His Honour also took into account that the clocks could have been unreliable (Judgment at [47]). In light of the expert evidence, there is no legal error in that reasoning.

106. What Norri pleaded has no bearing on whether the Magistrate is satisfied that Vakiloroaya has met its onus. In finding Vakiloroaya had not discharged his onus, his Honour was not limited to reasons based on the arguments made by Norri to support its defence.

Ground 3(c) — assessment of Vakiloroaya's evidence

Vakiloroaya’s submissions

107. The Magistrate incorrectly found at [35] of the Judgment that the error made in Vakiloroaya's initial affidavits was "a big mistake to have made" when, on the contrary, it was the paradigm example of the fallibility of human memory, over time in the context of litigation, which was able to be corrected by reference to contemporaneous documents, as the Court ought to have found. That finding also infected the finding at [50B] with error.

108. The finding at [43] of the Judgment that, if Vakiloroaya had money readily available that would be inconsistent with Vakiloroaya's earlier evidence that he "may be able to lend you $30,000 in about 2 weeks" and that on 9 July he received payment for a work project fails to draw a proper inference of fact. Fundamentally, the evidence ignores Vakiloroaya's other financial commitments, of which there was incontrovertible documentary evidence including in his correcting affidavit, as the Court ought to have found.

Norri’s submissions

109. Paragraph 69 of Vakiloroaya's submissions amounts only to disagreement with the Magistrate's finding that Vakiloroaya’s admission of error was a "big mistake" (Judgment at [35]). While not strictly necessary because the "assessment" of Vakiloroaya’s evidence is a pure question of fact, the Magistrate explained why he considered it was a "big mistake". The reasons included because the mistake was only realised two years after Vakiloroaya’s claim was filed and only corrected after documents subpoenaed from the bank showed the earlier evidence to be incorrect (Judgment at [35]). His Honour also considered Vakiloroaya’s explanation for the late change in his evidence (Judgment at [36]). Vakiloroaya’s submission that the evidence was "corrected by reference to contemporaneous documents" does not identify the documents. Further, and in any event, the Magistrate found the substituted explanation was "contested" (Judgment at [37]). In light of those findings, no error "infected" the finding that the "first sworn version of events was wrong on important matters concerning verifiable details and not corrected until after it was apparent it could be disproved" (Judgment [50B]).

110. Although not specifically identified, it appears Vakiloroaya contends that the Magistrate ought to have drawn a factual inference that Vakiloroaya did not have sufficient funds to lend Norri when they had the conversation in early July 2018. Although not framed as an inference, the Magistrate found that Vakiloroaya's evidence about his receipt of cash was inconsistent with his evidence that he did not have $30,000 to lend Norri in early July 2018 (Judgment at [43]).

111. In support of his argument, Vakiloroaya refers to the evidence about his home loan and personal loan in [29]–[37] of Vakiloroaya’s "correcting" affidavit. That evidence details how Vakiloroaya used withdrawals from his Westpac business account to pay his home loan and personal loan. It says nothing about how Vakiloroaya used cash from Mr Mina to manage his "financial commitments". For the reasons described in Norri’s submissions in relation to Appeal Ground 2(d), the Magistrate was focused on the source of the funds for the alleged loan, namely the cash from Mr Mina. In those circumstances, why the finding of inconsistency in Vakiloroaya's evidence at [43] of the Judgment is not "proper" is unclear. More importantly, Vakiloroaya has identified no legal error in the finding of the Magistrate at [43] of the Judgment.

Resolution

112. Once again, the drawing inferences by judicial officers is discretionary. The Magistrate did not find that the clocks had been backdated rather his Honour was addressing the evidence of the expert as to how the clocks could be backdated. In his report, the expert explained that the "Create Date" in the meta data of an electronic document is based on the system clock of the device that created the document (CB 782). The expert could not confirm if a system clock had been modified at the time of the creation of a document without the device used to create the document (CB 782). That device was not available to the expert so no further analysis of the system clock could be undertaken (CB 780 and CB 791).

113. His Honour made no specific finding as to Norri’s signature on the purported copy of loan agreement. While Vakiloroaya in his submission makes no reference to the fact that Norri denied signing the agreement, her denial meant that the Magistrate was not required to make a specific finding as to Norri’s signature on the purported agreement. In the light of her denial of signing the agreement, the expert was not able to establish whether this was so.

114. As to the error which was mentioned at [35] of the Judgment when the Magistrate said “that was a big mistake to have made”, Vakiloroaya said in his affidavit dated in May 2021 that he withdrew $35,000 from the bank and put cash in an envelope shortly after Norri arrived. In May 2023, he admitted that was an error and changed his evidence to say that the money came from a box containing cash. Vakiloroaya made the correction because the answer to the subpoena to the bank showed the earlier evidence was incorrect. The Magistrate was entitled to make this comment in these circumstances.

115. Therefore, this ground of appeal fails.

Appeal Ground 4 – No Probative Evidence

116. For this ground, Vakiloroaya submitted that the Magistrate made a number of critical findings of fact without evidence to support those findings, or directly contrary to the evidence, constituting error which infected the judgment.

Ground 4(a) — Ms Khatibi's evidence

Vakiloroaya’s submissions

117. The evidence of Ms Khatibi was considered at [41]-[42] of the Judgment. At [41] and [42] his Honour found:

118. Ms Khatibi's affidavit was served very late "without explanation". However, at [38] of Ms Khatibi’s affidavit, she explained the lateness of her evidence. Indeed, it appears his Honour understood that in allowing [38] of her affidavit to remain in evidence. It follows that his Honour erred in law by making that finding without any evidence to support it — indeed the finding was directly contrary to the evidence;

119. Ms Khatibi's claim that she saw Norri write her name as Torabi at the Breakfast Point club was not verified by documents "which would likely exist". There is no evidence that any such documents would likely exist and there is no proper basis to infer that to be the case, as it assumes knowledge of the internal workings of a particular club and its record keeping processes over many years. Accordingly, his Honour erred in making that finding without supporting evidence; and

120. Ms Khatibi's evidence was inconsistent with both the evidence of Vakiloroaya and Norri. His Honour correctly found it inconsistent with that of Norri. Naturally, she denied ever discussing the loan with Ms Khatibi. However, his Honour was incorrect in finding her evidence was inconsistent with Vakiloroaya’s or her own evidence. Vakiloroaya’s evidence and Ms Khatibi's were in fact entirely consistent by reference to Vakiloroaya’s evidence on this topic properly summarised by his Honour in the penultimate sentence of [42] and the other evidence in the case. With respect, it is apparent that his Honour misunderstood or forgot the effect of par 38 of Ms Khatibi's affidavit, that she only felt comfortable telling Vakiloroaya after undertakings were given (in APVO proceedings in October 2022). It follows that his Honour plainly erred in making those findings without supporting evidence — and in fact directly contrary to the evidence.

121. By reference to Ms Khatibi’s evidence, it is also apparent that the finding at [50 H] (which itself appears to be internally inconsistent) of the Judgment was not supported by, and is contrary to, the evidence such as pars 26 and 27 of Ms Khatibi's affidavit. It is also apparent that the similar findings made by his Honour at [24] and [25] of the Judgment were also infected with the same error.

122. These incorrect findings appear to have resulted in his Honour ignoring Ms Khatibi’s evidence of key admissions against interest by Norri. They have plainly infected the Judgment with significant error, such that it is unjust and should be set aside.

Norri’s submissions

120. Norri submitted that the Magistrate did not "ignore" Ms Khatibi's evidence of the alleged admissions. That evidence is summarised at [23] of the Judgment and later explained to be of "limited assistance" ([41]-[42] of the Judgment).

121. Vakiloroaya says that the Magistrate erred in finding that Ms Khatibi's evidence was served very late without explanation ([41] of the Judgment).

122. Vakiloroaya relies on Ms Khatibi's explanation for the delay in [38] of her affidavit. In cross-examination, Ms Khatibi gave evidence that:

123. Vakiloroaya first mentioned the loan to her in February to March 2021, but she did not reveal she knew about it; and

124. she told Vakiloroaya in October or November 2022, that she knew about the alleged loan to Norri.

125. Assuming Ms Khatibi's evidence as to why she did not file evidence in 2021 is correct (namely she was scared of Norri until she gave an undertaking), there is still no explanation for:

126. the absence of any evidence corroborating Vakiloroaya’s evidence that he told Ms Khatibi about the loan "a few months" before he swore his first affidavit on 14 May 2021; or

127. the delay between the disclosure in October or November 2022 and 19 May 2023 in circumstances where Vakiloroaya’s evidence in chief was filed in 2021.

128. One or both of those delays are the lateness to which the Magistrate was referring at [24] and [41] of the Judgment. For those reasons, the Magistrate's finding that Ms Khatibi's evidence was served very late without explanation was supported by evidence. As was his finding that Ms Khatibi's evidence was not verified by documents which would likely exist.

129. Vakiloroaya complains about the Magistrate's "finding" that documents supporting Ms Khatibi's evidence that she saw Norri sign her name "Torabi" were likely to exist. However, his Honour did not find the documents existed. Rather, the absence of the documents was part of the explanation as to why the Magistrate considered Ms Khatibi's evidence was of "limited assistance" and was not ultimately satisfied that Vakiloroaya discharged his onus.

130. To the extent there was a finding that documents were likely to exist, it would fall within the category of "common" or "general knowledge" which a judge may take into account to make findings of fact*: lAG Limited trading as NRMA Insurance v Tran* [2015] NSWSC 263 (Hall J) [26] quoting JD Heydon, Cross on Evidence (6th ed, 2000, Butterworths) [3020]. The Magistrate may use his knowledge based on the experience of life to form opinions, including that a licensed club would keep records of its entrants.

131. Finally, even if the Magistrate made an erroneous finding of fact (which is denied), such a finding could not be material in circumstances where it was only identified as a matter going to the weight of Ms Khatibi's evidence that she saw Norri sign her name as "Torabi".

Ground 4(b) — Norri's evidence about her children on 13 July 2018

128. Ground 4(b) relates to the following from the Magistrate's reasons at [48] of the Judgment:

“[Norri] had a 1 and 4 year old. There was evidence that the 4 year old was not in day care that day. While it's possible someone else was looking after them, I accept as likely her evidence she had the children that day...”

Vakiloroaya’s submissions

129. In accepting, at [48] of the Judgment, Norri's evidence that she had her children with her on 13 July, his Honour did so contrary to Norri's own evidence that she had no independent recollection of the events of that day, and the corrections she made to her affidavit evidence only from the witness box. Accordingly, the acceptance of Norri's evidence in this regard was also contrary to the evidence.

Norri’s submissions

130. The Magistrate did not "accept" that, as a matter of fact, Norri had one or both of her children on 13 July 2018. The observation was made in response to Vakiloroaya’s evidence that Norri did not have either of her children when she met him on 13 July 2018.

131. Norri accepted in cross-examination (on 26 February 2024) that she had no independent recollection of the events of 13 July 2018 and had used her bank statement to remind herself. In addition, Norri accepted that her evidence that she had her four-year-old child with her on 13 July 2018 was based on childcare records which showed she was not in childcare. Finally, Norri explained that she always had her one-year-old child with her because she was breastfeeding. In light of the evidence, it cannot be contended the Magistrate made a finding that it was likely Norri had her children entirely without evidence. The Magistrate was not required to have evidence of Norri's positive recollection in order to make the finding. Further, Norri's absence of recollection did not contradict that finding.

132. There is a reference in [70] of Vakiloroaya’s submissions to a correction Norri made to her affidavit. That correction was made to the second and third sentences of [19] of her affidavit. The bank statement at Annexure C of the affidavit showed a payment on 12 July 2018 rather than 13 July 2018. Whether Norri had breakfast with Ms Khatibi on 12 or 13 July 2018 is, in any event, of no relevance to whether a factual finding that Norri is likely to have had one or both of her children was without evidence.

Resolution

133. I have already addressed the ground of appeal concerning the Magistrate’s finding in relation to Ms Khatibi’s late affidavit. As to whether Norri had her one-year-old and four-year-old children with her on 13 July 2018, once Norri checked the daycare record, she accepted that the four-year-old child was not in the daycare on that day. Norri’s evidence is that she had her one-year-old child with her on that day as she was still breastfeeding. There was evidence to support a finding that it was likely that she had the children that day. There is no error of law or of mixed fact and law but even if there was, this is not a matter for which leave to appeal would be granted as it does not satisfy the test for leave to appeal set out earlier in this judgment.

134. Therefore, this ground of appeal fails.

Appeal Ground 5 – Procedural Fairness

Legal principles

135. Evidentiary rulings made during the course of a hearing are interlocutory in nature: Bowers v Northern Beaches Council & Grigull Custodian Pty Ltd (2022) [2022] NSWCA 253 [11] (Preston CJ, Kirk JA and Basten AJA agreeing). Leave is required to appeal from an interlocutory judgement or order: Local Court Act, s 40(2)(a).

136. The court must "exercise particular caution" in reviewing an interlocutory, discretionary decision of practice and procedure*: Kumar v Pines* [2024] NSWCA 134 [10]–[11] (‘Kumar’) quoting PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 [3]–[6] (Bell P, Simpson AJA) (PPK Willoughby) and Hamod v State of New South Wales [2011] NSWCA 375 [134]–[135] (Beazley JA) (‘Hamod’). As Beazley JA explained in Hamod at [134]–[135]:

“[134] … appeals from discretionary decisions on matters of practice and procedure raise particular considerations for an appellate court, regardless of whether an appeal is brought directly from an interlocutory decision, or from the court's final determination of the matter. The court at first instance must be free to exercise its discretion in matters of practice and procedure as the court considers necessary, having regard to the circumstances of the case. However, the discretion so vested in the first instance court is subject at all times to the primary obligation of ensuring a fair trial to the parties to the litigation.

[135] The court's concern with a fair trial is not divorced from the other considerations that the court has in the administration of justice. In particular, the concept of a fair trial is one that has regard to the interests of all parties to the suit. Nor, in this State, is it divorced from the court's statutory obligation to ensure the just, quick and cheap resolution of the real issues in the dispute or proceedings: the Civil Procedure Act, s 56(1).”

137. A “heavy burden” lies on an applicant seeking leave to appeal from a discretionary judgement on a question of practice and procedure*: PPK Willoughby* at [5].

138. When challenging an interlocutory order in an appeal against final judgment, the interlocutory order must have "affected the final result": Kumar at [6] citing Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478; [2002] HCA 22 [6] (Gaudron, McHugh and Hayne JJ) (‘Gerlach’). The reflects the "well-established principle that a new trial is not ordered where an error of law, fact, misdirection or other wrong has not resulted in any miscarriage of justice": Gerlach at [7].

139. Vakiloroaya contended that the Magistrate erred on 31 May 2023 by refusing to admit the following evidence:

140. Paragraph 20 of Exhibit I; and

141. Annexure P to Exhibit I.

142. Vakiloroaya also submitted the Magistrate erred on 26 February 2024 by not allowing Annexure P to be admitted and/or allowing Vakiloroaya’s counsel to show Mr Mina Annexure P and to ask Mr Mina questions about Annexure P.

143. The Magistrate's rulings on 31 May 2023 and 26 February 2024 were the subject of oral submissions and rulings by the Magistrate with reasons. In order to address Vakiloroaya’s submissions, it is necessary to detail the chronology of Vakiloroaya’s attempts to adduce evidence about Annexure P:

144. On the second day of the hearing of the proceeding on 31 May 2023, Vakiloroaya sought leave to rely on Annexure P to Exhibit I. On the same day, Vakiloroaya sought leave to file Ms Khatibi's affidavit and Vakiloroaya’s affidavit filed 10 May 2023. In 2021, Vakiloroaya was ordered to file its evidence in chief. The Magistrate dealt with the objection to par 20 of Exhibit I (together with pars 15-28) at CB 101–102.

145. Prior to the third day of the hearing of the proceeding on 26 February 2024, Mr Mina was subpoenaed by Norri to give evidence because a written response to a subpoena was not in admissible form. The subpoena is at Annexure D to the Affidavit of David Leamey sworn 18 February 2025. Mr Mina came to Court on 26 February 2024. He was ultimately not called by Norri because Vakiloroaya’s counsel did not object to the tendering of the written response to the subpoena. The response to subpoena is also at Annexure D to the Affidavit of David Leamey sworn 18 February 2025.

146. Vakiloroaya called Mr Mina as a witness on 26 February 2024. No affidavit of Mr Mina had been filed by Vakiloroaya in the proceeding. Vakiloroaya’s counsel adduced evidence from Mr Mina in examination in chief and he was cross-examined.

147. Objection was taken when Vakiloroaya’s counsel attempted to give Exhibit I (identified in the transcript as Exhibit 9) including Annexure P to Mr Mina. There was an exchange between counsel and the Magistrate and then the Magistrate delivered a ruling on the objection.

148. The focus of this ground is the failure to admit evidence and to allow questioning of Mr Mina in relation to the receipt of cash from Mr Mina which, had the evidence been admitted and/or the questioning allowed, would clearly have affected His Honour's decision. Vakiloroaya submitted that it was a critical error and that it denied him procedural fairness which infected the whole of the Judgment such that it would be manifestly unjust for the Judgment to stand in those circumstances.

149. At [37] of the Judgment, his Honour found that Vakiloroaya “had no documents detailing the receipt of the $35,000, or the alleged balance of $15,000 also said to have been paid in cash at some stage so as to total $100,000 paid for a 10pc share in a company”. At [38] his Honour found that the receipt of the $35,000 from Mr Mina was not corroborated by Ms Khatibi. At [39] his Honour found that "Mr Mina did not say how much he had given Vakiloroaya by 13 July" although his evidence was that he paid $50,000 in cash to Vakiloroaya "sometime between February and August" 2018. At [40] his Honour found that it would be "expected" that in a business transaction of that kind "any cash payments would be recorded as to dates and amounts" by Mr Mina (who was an accountant) or Vakiloroaya. His Honour also considered the absence of any "written record of the date of the receipt of the cash said to have been used to lend the money" at [50E] in finding that Vakiloroaya had failed to discharge his onus.

150. Vakiloroaya submitted that the Magistrate ultimately found these matters of considerable importance in dismissing the claim, but his Honour rejected the admission into evidence, and did not allow questioning in relation to, an important document, being an agreement between Vakiloroaya and Mr Mina documenting the very transaction to which his Honour referred as set out above and the schedule and timing of payments agreed pursuant to it.

151. On 31 May 2023, his Honour rejected certain paragraphs of Exhibit 9, including [20] which referred to Annexure P. His Honour did so on the basis that "it's late and it's too peripheral and I reject it".

152. On 26 February 2024, Mr Mina was called by Vakiloroaya to give evidence (he was in Court on that day because a subpoena had been issued to him by Norri, without notice having been given to Vakiloroaya). Over Norri's objection, his Honour ultimately rejected a question being asked of Mr Mina about that document, on the basis that it was "central" and was proposed to be relied upon now, having been rejected on the basis that it was late previously. Under cross-examination, Mr Mina gave forthright evidence that he paid Vakiloroaya $50,000 in cash between February and August 2018, but he could not then remember the dates as it was many years ago.

153. The agreement between Vakiloroaya and Mr Mina was corroborative of both Vakiloroaya's and Mr Mina's evidence as to the source of the cash lent to Norri and, critically, as to the timing of the cash payments. In those circumstances, it ought to have been allowed into evidence on 31 May 2023, and not rejected on the basis that it was late and peripheral. Further, Vakiloroaya should not have been prevented from asking Mr Mina questions in relation to the document by showing it to him or tendering it subsequently on 26 February 2024, by which time the Magistrate had apparently changed his view of the document to it being central.

The decision of 31 May 2023

150. Vakiloroaya alleges that he was denied procedural fairness because [20] of Exhibit 9 and Annexure P were not admitted. Vakiloroaya says that because the evidence is about the source of the cash payments from Mr Mina to Vakiloroaya and the "timing" of the cash payments, it was "plainly relevant.” Not all evidence is admissible at any time in a proceeding because it is relevant. In any event, as is apparent from the transcript, the Magistrate appreciated the relevance of the evidence but, in balancing the competing considerations, decided to admit only some evidence of the alleged source of Vakiloroaya’s cash for the loan.

151. More specifically, at the hearing on 31 May 2023, the Magistrate appreciated that at para 20 and Annexure P was to explain the presence of $35,000 cash in Vakiloroaya’s security box (or "tin"). The Magistrate admitted evidence that Vakiloroaya had received the cash from Mr Mina and stored it in his security box. His Honour refused to admit para 20 (and Annexure P) because it was "too late and too peripheral”.

152. There is no dispute the evidence was late. The Magistrate addressed and accepted Norri's submissions about the inadequacy of Vakiloroaya’s explanation for the delay (Judgment at [36]).

153. Paragraph 20 and Annexure P are only of "peripheral" relevance because they go to the purported source of the obligation for Mr Mina to pay Vakiloroaya cash. They are not evidence of any cash payment by Mr Mina. They are not evidence of any receipt of cash by Vakiloroaya. As noted above, evidence of the latter given by Vakiloroaya was admitted by the Magistrate. Paragraph 20 and Annexure P are only of the most marginal relevance to the fact in issue, namely whether Vakiloroaya loaned the Norri $30,000. At best, they go to the question of whether and when Vakiloroaya had sufficient funds to loan Norri $30,000. Even assuming the evidence established he had the funds, that is in no way determinative of whether Vakiloroaya, in fact, loaned Norri $30,000 as alleged.

154. For similar reasons, even if Vakiloroaya established he had been denied procedural fairness, the admission of the evidence could not have affected the final result. In paragraph [50E], the Magistrate identified the absence of a written record of the receipt of cash as one of the reasons he was not satisfied that Vakiloroaya had discharged his onus. The reasons to which Vakiloroaya refers in [72] of his submissions are also about the absence of evidence of the receipt of cash or records of the dates of payment:

155. "He had no documents detailing the receipt of the $35,000" (Judgment at [37]);

156. "The receipt of $35,000 was not corroborated by Vakiloroayas former wife" (Judgment at [38]); and

157. "It would be expected...that any cash payments would be recorded as to dates and amounts by the payer (who was an accountant), or the payee" (Judgment at [40]).

158. Even if Annexure P documented amounts to be paid by Mr Mina to Vakiloroaya, it did not evidence the fact of the payment or the timing of those payments. A schedule of payments does not prove that payments were made in accordance with that schedule. Further, the Magistrate received evidence from Mr Mina that he paid Vakiloroaya $100,000 in six payments for a share of Vakiloroaya’s trade secret. With the exception of the proposed dates of the six payments, the substance of Annexure P was in evidence. The admission of Annexure P would not change the fact there was no contemporaneous documentary evidence of the amount Vakiloroaya had received from Mr Mina by 13 July 2018.

159. It is also relevant in reviewing this ruling on an objection that the Magistrate was, consistent with s 58 of the Civil Procedure Act 2005 (NSW) (CPA), balancing the dictates of justice, which include the efficient and timely use and disposal of the proceedings. His Honour was clearly concerned about "opening up" a further line of inquiry which may delay the proceeding further. That is hardly surprising in circumstances where Vakiloroaya sought leave (without advanced notice to the Court) for three new affidavits on the second day of the hearing of the proceeding when cross-examination of Vakiloroaya’s witnesses had already commenced.

160. The Magistrate decided to "cut through" the issue after only hearing from Norri, but not Vakiloroaya. Further, His Honour decided the issue on a different basis to the reasons for the objection as outlined by Norri without hearing from Vakiloroaya on those matters.

161. Vakiloroaya was not afforded procedural fairness in relation to the 31 May 2023 decision to reject the key paragraphs, particularly par 20, and the agreement at Annexure P referred to in that paragraph.

The decision of 26 February 2024

159. As set out earlier in this Judgment, Norri issued a subpoena in relation to the cash payments made by Mr Mina to Vakiloroaya after the hearing day on 31 May 2023. In response to the subpoena, Mr Mina sent a letter to the Court in relation to the cash payments, which Norri proposed to, and ultimately did, tender without objection on 26 February 2024.

160. Vakiloroaya then began leading evidence in chief from Mr Mina in relation to his response to the subpoena, which Norri had only just tendered. Shortly afterwards, Norri took objection to questions being asked about the cash payments referred to in Mr Mina's response to the subpoena issued by Norri. There was no proper basis for the objection taken by Norri, as it related to matters arising from a document that Norri had just tendered, and answers given by Mr Mina in relation to questions about that document, to which Annexure P was relevant.

161. Again, Vakiloroaya submitted that he was denied procedural fairness in relation to this decision as he was not afforded an opportunity to reply to the matters raised in the Norri's objections before the Court ruled on the objection. Ultimately, Vakiloroaya was prevented by the Court from asking Mr Mina about matters relevant to Exhibit 13, which Norri had just tendered, by reference to Annexure P.

162. Annexure P was a business record signed by both Mr Mina and Vakiloroaya. It was important to the just resolution of the case, as the Magistrate then found (despite finding in rejecting it previously that it was "peripheral"). It was of critical significance to Exhibit 13 tendered only that day, and the evidence that had just come from Mr Mina to the effect that he paid cash to Vakiloroaya "in five different months". Annexure P contained the precise months and the amounts on which Mr Mina had agreed to pay cash to Vakiloroaya and was therefore of critical importance to the case (see Judgment at [37], [39]-[40] and [50E] in particular).

163. Vakiloroaya submitted that he was prejudiced and prevented from having a fair trial on the basis that despite its importance, the Magistrate prevented Vakiloroaya from showing Mr Mina that document, asking him questions about it and relying on the Annexure P.

Resolution

164. Whether or not the documents are admitted into evidence is an interlocutory decision, for which leave to appeal is required. These interlocutory rulings do not involve an issue of principle, questions of public importance nor an injustice which is clear is that it goes beyond merely what is arguable. Leave to appeal is refused.

165. In any event, it is my view that there is no denial of procedural fairness in his Honour refusing to allow Vakiloroaya’s counsel to show Mr Mina Annexure P and to ask Mr Mina questions about Annexure P, as the matter had already run over three hearing days.

166. The Magistrate ruled on 26 February 2024, that Vakiloroaya was not permitted to adduce Annexure P through Mr Mina during his examination in chief. More specifically, His Honour made a ruling that in the absence of any explanation about why an affidavit of Mr Mina had not been filed since at least 31 May 2023 (when Vakiloroaya had the same solicitor and counsel as the third day), that the dictates of justice were not served by allowing Vakiloroaya’s counsel to ask a question "to prove a disagreement" (T64 [6]-[24], CB 256; T62 [44]-T63 [25], CB 254-255). In making that ruling, the Magistrate apparently accepted Norri's submissions that there would be significant prejudice to Norri if Vakiloroaya were allowed to rely on evidence previously rejected that it had no notice would be sought to be relied on again on the final day of the hearing (T64 [9]-[14], CB 256).

167. The Magistrate's observation that Annexure P was "pretty central" in the context of explaining the likely consequences of allowing Vakiloroaya to adduce the evidence on the final day of the hearing (T63 [15]-[25], CB 255). His Honour identified that if the document were admitted then it was likely Norri would seek an adjournment and an opportunity to cross-examine because it was "pretty central". That consideration only made Vakiloroaya’s failure to adduce the evidence earlier more acute and weighed against the admission of the evidence at that late stage. Even if the Magistrate formed the view the document was "pretty central", procedural fairness does not demand it be admitted, especially where it would cause Norri significant prejudice. The Magistrate took into account s 56 of the CPA in making the decision not to allow par 20 in Exhibit I and Annexure P of Exhibit I.

168. Norri would then be prejudiced and may have requested an adjournment so that Norri’s legal representative could cross-examine Mr Mina. Even if Vakiloroaya has identified a failure accord procedural fairness, that failure and the admission of the evidence could not have affected the final result.

169. There is no error of law. Appeal Ground 5 fails.

The Result

170. The result is that the appeal fails. The further amended summons dated 11 April 2025 is dismissed. The decision of Magistrate Brender is affirmed.

Costs

171. Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant’s costs on an ordinary basis.

The Court Orders that:

1. The appeal is dismissed.
2. The further amended summons filed 11 April 2025 is dismissed.
3. The decision of Magistrate Brender dated 11 July 2024 is affirmed.
4. The plaintiff is to pay the defendant’s costs on an ordinary basis.

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