Vakiloroaya v Norri

1. [1]

   THE COURT: This is an application for leave to appeal from a decision of Harrison AsJ: Vakiloroaya v Norri [2025] NSWSC 672. The applicant, Vahid Vakiloroaya, and the respondent, Leila Norri, have been engaged for some years in “a protracted history of acrimonious litigation”: at [5]. This chapter of that litigation involves a failed application by the applicant to establish the existence of a loan of $30,000 to the respondent.

2. [2]

   On 19 February 2021, the applicant commenced proceedings against the respondent in the Local Court of New South Wales seeking recovery of $30,000 allegedly lent to the respondent on 13 July 2018. The applicant asserted that the respondent had signed an agreement the applicant had drafted evidencing the loan (an original of that document can no longer be located and the computer on which the agreement was drafted is no longer available).

3. [3]

   On 1 December 2021, the respondent filed a further amended defence. She denied that she had signed the loan agreement and denied that any money had been advanced to her as recorded in the alleged loan agreement.

4. [4]

   The Local Court proceedings were heard by Brender LCM over three days on 30 September 2022, 31 May 2023 and 26 February 2024. Affidavits were sworn by the applicant and respondent and each apparently gave evidence, although the applicant did not put any of that affidavit evidence or transcripts of the hearing before the Magistrate in the materials placed before this Court.

5. [5]

   On 14 June 2024, the Magistrate dismissed the applicant’s claim. In his written reasons, his Honour did not find that the signature on the alleged loan agreement was a forgery, but proceeded on the basis that the plaintiff still bore the onus to the civil standard of proving the existence of the loan. His Honour stated that “[e]vidence about the legitimacy of that document is an important matter to be taken into account in assessing whether the plaintiff has discharged the onus”: at [32].

6. [6]

   In assessing the evidence as a whole, his Honour “considered the following in combination” (at [50]):

   1. (1)

      that the term of the loan was alleged to be for one year, falling due in 2019, and yet the applicant could not point to any evidence at all of any claim made for repayment until in 2021. That claim was made in the context of other civil cases and a criminal charge against the applicant (in which the respondent was a witness) and a falling out between the applicant’s and respondent’s families;

   2. (2)

      that the applicant’s first sworn version of events was wrong. He asserted that the $30,000 had been withdrawn from a bank account in Ultimo. That was the version contained in an affidavit read on the first day of the hearing. A subpoena to the bank proved that this version was untrue. The applicant’s version then changed completely. He said the source of the cash was a box stored at home. The $30,000 in cash was allegedly taken from this box and handed to the respondent. The Magistrate took into account the fact that the applicant gave incorrect evidence about important matters which were capable of verification and the applicant did not correct this egregious error until after it was apparent it could be disproved;

   3. (3)

      that outside the “loan agreement” allegedly signed in July 2018, whilst there was some oral evidence there was no written or alleged oral evidence of any reminder or claim for repayment;

   4. (4)

      that the loan was not the subject of any contemporaneous communications (such as emails or text messages). There were no contemporaneous phone records of the applicant and respondent communicating (i.e., on the day of the alleged loan: see at [7]);

   5. (5)

      that there is no record at all recording the receipt of $30,000 in cash said to have been the subject matter of the loan;

   6. (6)

      that there is no original of the alleged “loan agreement” in existence. The Magistrate regarded the applicant’s explanation for why he did not have the original as “unconvincing”: at [44]. The Magistrate found that by reason of absence of the original and the computer used to create the document, there was an opportunity to create a false document and/or false signature. Those matters could not properly be tested; and

   7. (7)

      there was no evidence of any use of the loan money by the respondent, nor any evidence of an apparent need for money other than an alleged desire to “seek legal advice”.

7. [7]

   There was also evidence from Ms Khatibi, the applicant’s former wife. The Magistrate ultimately concluded that this evidence was of “limited assistance”: at [41]. The applicant denied that he told Ms Khatibi about the $30,000 loan in 2018 and did so only in 2021. In her affidavit (which like all other primary evidence was not before this Court), Ms Khatibi gave a very different account. She said she had been told by the respondent about the loan in 2018 and had discussed the loan with the applicant at that time. The Magistrate records that when cross-examined, Ms Khatibi gave yet another account, namely that the first time she discussed the loan with the applicant was in 2022. By reason of these fundamental inconsistencies, and the fact that Ms Khatibi’s evidence, prepared years after the relevant events, purported to recall some events with “great specificity”, the Magistrate gave her evidence little weight.

8. [8]

   His Honour also considered expert evidence of a Mr Curtis who examined the copy of the alleged loan agreement. That evidence did not concern the question of who signed the agreement but rather when the agreement was created. By reason of the unavailability of the original “loan agreement” and the computer used to create that agreement, Mr Curtis’ evidence was of limited utility.

9. [9]

   Read fairly and in context, the conclusion of the Magistrate was that his Honour was not satisfied that the respondent had signed the loan agreement and was not satisfied that the applicant had advanced the respondent $30,000 in July 2018 as alleged. The claim was dismissed.

10. [10]

    The applicant appealed to the Supreme Court pursuant to sections 39–41 of the Local Court Act 2007 (NSW) on five grounds, being:

11. [11]

    Her Honour dismissed Appeal Ground 1. Her Honour considered that the Magistrate “correctly identified the principles to be applied in deciding whether Vakiloroaya had discharged his onus, at [31]-[34] of the Judgment”: at [19]. Her Honour found that the Magistrate was entitled to make the findings of fact in [50] of the judgment which we have summarised at [6] above. In her Honour’s view, those matters were not irrelevant considerations.

12. [12]

    Her Honour dismissed Appeal Ground 2. Her Honour affirmed that the weight that was given by the Magistrate to the oral evidence and written record was open to him. Her Honour considered that the Magistrate did consider the terms of the alleged loan agreement. The Magistrate was not obliged to assign weight to every piece of evidence.

13. [13]

    Her Honour found that Brender LCM had considered the expert evidence of Mr Curtis. By reason of the absence of the computer used to produce the alleged loan agreement, Mr Curtis’ evidence was inconclusive and Brender LCM found that this evidence had a neutral effect. Harrison AsJ discerned no error in this approach.

14. [14]

    The Magistrate gave a number of reasons for his conclusion that Ms Khatibi’s evidence was of limited assistance. Harrison AsJ discerned no error in this approach.

15. [15]

    Her Honour dismissed Appeal Ground 3. Her Honour affirmed that the drawing of inferences by the Magistrate was open to him: at [112]. The Magistrate did not make a finding that the clocks had been backdated. Rather his Honour was addressing the evidence of the expert as to how the clocks could be backdated: at [112].

16. [16]

    Given the state of the evidence before him, the Magistrate was not required to make a specific finding about the respondent’s signature on the purported agreement: at [113]. A fair reading of the Magistrate’s decision is that his Honour was not satisfied it had been shown the respondent had signed the document.

17. [17]

    The Magistrate was entitled to comment that the fundamental error by the applicant about the source of the funds used to make the alleged loan mentioned at [35] of the judgment “was a big mistake to have made”. This was because the applicant “made the correction because the answer to the subpoena to the bank showed the earlier evidence was incorrect”: at [114].

18. [18]

    Her Honour dismissed Appeal Ground 4. Her Honour considered that it was likely that the respondent had her children with her on 13 July 2018, which was another matter tending against acceptance of the applicant’s account of events on that day. Her Honour found that there was no error of law or of mixed fact and law made by the Magistrate. Even if there had been such an error, this was not a matter for which leave to appeal would be granted, as it did not satisfy the test for leave to appeal under the Local Court Act.

19. [19]

    Ground 5 of the appeal to the Supreme Court below has been abandoned in the current application and need not be further addressed.

20. [20]

    On 24 September 2025, the applicant filed a Summons seeking leave to appeal. On 31 October 2025, the applicant filed an amended Draft Notice of Appeal, containing the following proposed grounds of appeal:

21. [21]

    The applicant submitted that the following questions are involved:

22. [22]

    The applicant submitted that the “most fundamental problem” with the decision of Brender LCM was that his Honour did not decide that the written loan agreement was false, yet still proceeded to dismiss the claim despite that critically important document. The “fundamental problem” with the decision of Harrison AsJ was that her Honour did not correct this error of Brender LCM, being an error of law by failing to exercise the Court’s jurisdiction.

23. [23]

    It was also submitted that there was a failure to exercise jurisdiction. The applicant’s former wife, Ms Khatibi, gave evidence before the Local Court of the respondent making a key admission to her about the loan. Given that Brender LCM did not reject that evidence, and made no adverse credit finding against Ms Khatibi, there was no proper basis to find that her evidence was of “limited assistance”.

Consideration

1. [24]

   The amount at issue in these proceedings being less than $100,000, leave to appeal is required by s 101(2)(r) of the Supreme Court Act 1970 (NSW). A grant of leave to appeal generally requires the identification of an issue of principle, a question of public importance or a reasonably clear injustice going beyond something that is merely arguable: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[38] (“Be Financial”); The Age Company Ltd v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13]; Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]; PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 at [6]; Cheng v Motor Yacht Sales Australia Pty Ltd t/as The Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118 at [15] (“Cheng v Motor Yacht Sales”).

2. [25]

   In Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69 at 6 it was pointed out that, where small claims are involved, it was desirable that there be “early finality and determination of litigation otherwise the costs which will be involved are likely to swamp the money sum involved in the dispute”. As Kirby P explained in Gurr v Robinson (Court of Appeal (NSW), 10 February 1986, unrep):

3. [26]

   In Ritson v Commissioner of Police, New South Wales Police Force [2019] NSWCA 106 at [39], Gleeson JA, with whom Emmett AJA agreed, observed that:

4. [27]

   The need for and desirability of there being proportionality between the value of the matter or amount in issue, and the costs of litigating that matter or issue is also reflected in s 60 of the Civil Procedure Act 2005 (NSW), which provides that “[i]n any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute.” It was in the context of s 60 of the Civil Procedure Act that Basten JA, in Be Financial at [37], observed that:

5. [28]

   Litigation such as the present, where the costs far exceed the amount in issue, provides “a poor candidate for a grant of leave”: Burrows v Macpherson & Kelley Lawyers (Sydney) Pty Ltd [2021] NSWCA 148 at [44].

6. [29]

   As Bell CJ said in Cheng v Motor Yacht Sales at [21]:

7. [30]

   This is a clear case where leave to appeal should be refused. The dispute relates to an allegedly unpaid loan of $30,000. A sum greatly in excess of that amount has already been spent on legal costs. A grant of leave would lead, inevitably, to the expenditure of yet more in legal costs. The costs following a grant of leave in the present case would be grossly disproportionate to the amount at stake.

8. [31]

   The applicant does not identify any issue of principle or question of public importance. The alleged “fundamental problem” said to give rise to a substantial injustice does not arise.

9. [32]

   We do not accept the characterisation by the applicant of the decisions of Harrison AsJ or Brender LCM in this regard. The applicant tendered a copy of a “loan” document said to have been signed by the respondent. This was said to evidence the critical underlying disputed fact, the advance of a $30,000 loan. The respondent denied that she had signed the document or received a loan from the applicant, in any amount.

10. [33]

    Brender LCM, correctly, determined that the applicant bore the onus of satisfying him that the loan had been made. Harrison AsJ, correctly, found no error in the learned Magistrate’s approach. It is not correct that the Magistrate had to make a finding that the alleged loan agreement was a forgery before deciding that the plaintiff had failed to prove his case: Burnside v Mulgrew; Re the Estate of Doris Grabrovaz [2007] NSWSC 550 at [28] (per Brereton J); Miles v Amos [2021] NSWSC 38 at [88] (per Hallen J).

11. [34]

    The Magistrate considered the evidence about the alleged loan agreement in the context of the evidence as a whole and concluded that he was not satisfied that the respondent had signed the alleged loan agreement or that the applicant had made the $30,000 loan. The applicant has not shown a reasonably clear injustice going beyond something that is merely arguable.

12. [35]

    As to the alleged “admission” said to have been made by the respondent to the applicant’s former wife, Ms Khatibi, no error has been shown in the decision of Brender LCM who found the evidence (which was not before us) to be of “limited assistance”. Harrison AsJ correctly concluded that the Magistrate was entitled to give little weight to the evidence of Ms Khatibi. A question of weight does not demonstrate a basic misunderstanding by Brender LCM of the case brought, nor a failure to exercise the Court’s jurisdiction. No error has been shown in the approach of Harrison AsJ to that finding. The alleged failure to exercise the Court’s jurisdiction was not a complaint made by the applicant to Harrison AsJ about the decision of the Magistrate and no sufficient reason has been shown why the applicant should be given leave to pursue that complaint for the first time in this Court. The applicant has not shown a reasonably clear injustice going beyond something that is merely arguable.

13. [36]

    Leave to appeal should be refused with costs.

Orders

1. [37]

   For the foregoing reasons we make the following orders:

   1. (1)

      Leave to appeal refused.

   2. (2)

      Applicant to pay the respondent’s costs.