Naboulsi v Khalil

1. [1]

   The present defendant, Bass Khalil, commenced proceedings in the Local Court on 10 November 2020, claiming $30,000 which he alleged was a loan he had made to Wassim Naboulsi, the present plaintiff. To avoid confusion, I will refer to the parties by their names.

2. [2]

   The loan was alleged to have been made in three tranches as follows:

3. [3]

   The proceedings were heard by Magistrate Walsh in the Local Court on 21 October 2022 and 7 November 2022. The learned Magistrate gave judgment on 14 April 2023 in favour of Mr Khalil for $43,518.65, being the loan sum, interest of $13,216.65 and fees of $302. Mr Khalil was also awarded costs.

4. [4]

   Mr Naboulsi now appeals against that judgment on three grounds as follows:

Mr Khalil’s case

1. [5]

   Mr Khalil and Mr Naboulsi are first cousins although they did not meet until mid-2014 despite each being aged in their forties.

2. [6]

   Mr Khalil said that Mr Naboulsi told him in late 2015 that he wanted to start his own restaurant in Bankstown. In August 2016, Mr Naboulsi said he had secured a lease for a shop at The Boulevarde in Bankstown but he needed a loan until he received his settlement from the break up of a partnership at a café.

3. [7]

   On 3 October 2016, Mr Naboulsi asked to borrow $5,000 which he said he needed for the rent and to pay some tradesmen for work being carried out at the shop. He said the loan would be repaid after a six week period when he was expecting to receive his settlement payment from the café. Mr Khalil went home and obtained $5,000 in cash which he then gave to Mr Naboulsi.

4. [8]

   On 12 November 2016 the two men were together at Mr Naboulsi’s shop when Mr Naboulsi requested a further loan of $20,000 for the shop fit-out and other expenses. Mr Khalil provided $20,000 in cash that day to Mr Naboulsi.

5. [9]

   Three days later, on 15 November 2016, Mr Naboulsi mentioned that he was short $5,000 for the signage and equipment to finish the shop. He asked to borrow a further $5,000 which he said would be repaid within a couple of days from his settlement of $70,000 from the café. Mr Khalil agreed and gave him the $5,000.

6. [10]

   Sometime in late December 2016 or early January 2017, Mr Khalil sought repayment of the money. Mr Naboulsi said he would have the money the following week.

7. [11]

   On 7 January 2017, Mr Khalil went with his two brothers, Shadi and Mohammed, and demanded that Mr Naboulsi repay the money. As a result of the way the demands were made on Mr Naboulsi, he called the police. He provided a statement to the police, and apprehended domestic violence orders (ADVOs) were then issued against Mr Khalil and his two brothers.

Mr Naboulsi’s case

1. [12]

   Mr Naboulsi said that in about November 2016 a mutual friend of both him and Mr Khalil met at a takeaway shop in Bankstown. The mutual friend was Waleed Omar. Mr Omar wanted to borrow $20,000 from Mr Khalil, and Mr Omar agreed to transfer ownership of a BMW X6 motor vehicle as security for the loan. The loan was to be repaid within six weeks together with interest of $10,000, and Mr Khalil would then transfer ownership of the motor vehicle back to Mr Omar.

2. [13]

   The following day, Mr Khalil called Mr Naboulsi and said he had given the $20,000 to Mr Omar. Mr Omar then gave Mr Naboulsi the registration papers for the BMW to enable the transfer. Mr Naboulsi said that about three days later he went with Mr Khalil to the Bankstown motor vehicle registry to effect the transfer.

3. [14]

   On about 1 December 2016, Mr Khalil rang Mr Naboulsi to inform him that he had had an accident in the motor vehicle, and it had been towed away for repair. A few days later, Mr Khalil rang Mr Naboulsi to say that the insurance company would pay him $35,000 because the motor vehicle was to be written off. Mr Naboulsi said that at about the end of December 2016 Mr Khalil told him that he had received the $35,000 from the insurance company, and that he regarded the loan as “all done”, and he was not under an obligation to return any security to Mr Omar.

Mr Khalil’s case in reply

1. [15]

   Mr Khalil denied lending any money to Mr Omar. He said on each of three occasions the request for money was from Mr Naboulsi.

2. [16]

   Mr Khalil also said that he did not agree that any BMW X6 motor vehicle was given to him as security for any loan of $20,000. He said that in about September 2016 he borrowed a BMW X6 from Mr Naboulsi for a short time because he had to do some repairs on his own car, and he was regularly helping out Mr Naboulsi at the shop, which involved Mr Khalil travelling to and from Ingleburn. He said he did have a minor accident in the vehicle, but it was subsequently repaired and returned to Mr Naboulsi sometime between November 2016 and January 2017. He said the vehicle was never written off, and he produced a document from revs.com.au in relation to the BMW X6. That document showed that the vehicle had never been written off.

The proceedings in the Local Court

1. [17]

   Mr Khalil was represented by Mr L James of counsel, and Mr Naboulsi appeared for himself.

2. [18]

   On 21 October 2022, both Mr Khalil and his brother Mohammed gave their evidence by affidavits and were cross-examined by Mr Naboulsi. Mr Naboulsi used an interpreter but the transcript suggests that he had some understanding of English.

3. [19]

   After the two witnesses were cross-examined, Mr Khalil’s case was closed. The Magistrate then received an affidavit from Mr Naboulsi and a document tendered by Mr Naboulsi which was said to be a screen shot of an SMS sent by Mr Khalil to Mr Naboulsi (the transcript wrongly describes this document (Exhibit B) as an affidavit of Mr Naboulsi of 24 June 2022). The proceedings were then adjourned part heard to 7 November 2022.

4. [20]

   The issue to which the grounds of appeal relate concerns the allegation by Mr Naboulsi that the BMW X6 was given to Mr Khalil as security for the loan made to Mr Omar. After the matter was adjourned part heard, and before the resumed date, Mr Naboulsi issued a subpoena to the Proper Officer for Transport for New South Wales to produce documents relating to the registered owners of the BMW X6. The documents show that Mr Khalil apparently transferred ownership of the motor vehicle to a Patricia Butler on 22 December 2016. Prior to that there was a transfer from Rabih El Mobasser Dandan to Mr Khalil on 6 June 2016. I will refer to the subpoenaed documents as “the registration documents” or “the documents”, noting that they are the same as the “Document” referred to in the grounds of appeal.

5. [21]

   Mr Naboulsi’s complaint on appeal is that he either wanted to tender the registration documents or believed that they were in evidence, and that the Magistrate denied him procedural fairness by not facilitating their being tendered by Mr Naboulsi (to put it as neutrally as possible). Mr Naboulsi submitted that if these documents had gone into evidence, they would have cast doubt on the credibility of Mr Khalil, with the result that he (Mr Naboulsi) was deprived of the possibility of a successful outcome.

6. [22]

   When the matter was listed for further hearing on the resumed date, 7 November 2022, the Magistrate said he would call through the list, but he asked the parties not to go away. Mr Naboulsi’s interpreter then said:

7. [23]

   The Proper Officer for Transport for New South Wales was then called and he produced the registration documents in response to the subpoena. Counsel for Mr Khalil had not even seen a copy of the subpoena. When a copy was handed to him he was given time to take instructions.

8. [24]

   When the Magistrate had finished calling through his list and returned to the matter, Mr James indicated that there was no objection to the subpoena but, depending on what documents were produced, he said he might need to seek some instructions. The Magistrate granted general access to the parties, with Mr Naboulsi to have first right of inspection. The Magistrate then adjourned to enable the documents to be inspected.

9. [25]

   When the Magistrate returned to the bench, Mr James informed the Court that the documents produced to the Court under subpoena dealt with the BMW that had been the subject of previous discussion in the proceedings. The transcript then reads:

10. [26]

    The Magistrate then told Mr Naboulsi that he (the Magistrate) had admitted Mr Naboulsi’s affidavit into evidence, and he was now to be cross-examined.

11. [27]

    At the conclusion of the cross-examination, the Magistrate invited Mr Naboulsi to clarify any of the answers he had given in cross-examination if he wished to do so. Mr Naboulsi said that he did not. The Magistrate then said to Mr Naboulsi:

Legislation and legal principles

1. [28]

   The Local Court Act 2007 (NSW) relevantly provides:

2. [29]

   In Hamod v State of New South Wales and Anor [2011] NSWCA 375 Beazley JA (as her Excellency then was) (with whom Giles and Whealy JJA agreed) set out principles relevant to a court dealing with an unrepresented litigant. Her Honour said:

3. [30]

   In Norfeld Pty Ltd v Amanda Lee Jones Trading as Watermark Patent & Trademark Attorneys [2014] NSWSC 992 Hamill J noted at [92] that the fact that a litigant is not represented by a lawyer may have some relevance to the content of the requirements for natural justice in a particular case. His Honour then set out the following extracts from cases dealing with the principles to be applied where a litigant is unrepresented:

Submissions

1. [31]

   Although, as noted earlier, Mr Naboulsi’s written submissions asserted that he tried to tender the registration documents, Ms Asal, who appeared for him at the appeal, appeared to accept that they had never been tendered. Rather, her complaint was that the Magistrate failed to ask Mr Naboulsi what he intended to do with the documents, and in that way denied him procedural fairness.

2. [32]

   By reason of the way the matter was argued before me, it is convenient to deal with the grounds compendiously. Separate submissions were not made in relation to each of the grounds of appeal. It is doubtful if any of the grounds of appeal involves a question of law only, because each ground involves a factual enquiry into what actually occurred at the hearing in relation to the documents in question and what the Magistrate did or did not do.

3. [33]

   Mr Naboulsi submitted that during the course of the hearing he attempted to tender the documents, and counsel acting for Mr Khalil did not articulate a clear ground of objection to them. In those circumstances, Mr Naboulsi submitted that the documents should have been admitted into evidence because they satisfied the test of relevance. Mr Naboulsi submitted that by not admitting the documents into evidence, the Magistrate denied him procedural fairness.

4. [34]

   Mr Naboulsi submitted that the Magistrate ought to have provided him with assistance about the tender of the documents in circumstances where he was under the assumption that the documents had been admitted into evidence by reason of the fact that they were on the Court file, handed down in court and given to Mr Khalil’s barrister. Mr Naboulsi submitted that the Magistrate failed to determine the objection from Mr James. He submitted that where Mr James did not articulate a clear ground of objection to the documents, they were prima facie admissible and should have been admitted into evidence.

5. [35]

   Mr Naboulsi submitted that if the documents had been admitted into evidence they would have significant credibility implications for Mr Khalil who had denied that he was the registered owner of the vehicle.

6. [36]

   Mr Naboulsi drew attention to r 51.53 of the Uniform Civil Procedure Rules 2005 (NSW) to submit that the Court needed to reach a positive opinion that the error relied upon caused a substantial miscarriage of justice. He submitted that a denial of procedural fairness was material in the sense of being a substantial wrong or miscarriage, relying on Nobarani v Mariconte (2018) 265 CLR 236; [208] HCA 36 at [39].

7. [37]

   Mr Naboulsi submitted that the registration documents went to the very foundation of Mr Naboulsi’s defence, that the BMW was provided to Mr Khalil as security for the loan.

Consideration

1. [38]

   At various times during the trial, the Magistrate explained concepts and principles to Mr Naboulsi. When Mr Khalil’s affidavits were being read his Honour explained what an objection was.

2. [39]

   On the first day of the hearing just before the luncheon adjournment Mr James sought to tender a statement made by Mr Naboulsi to the police before the ADVOs were issued. Following Mr Khalil’s affidavit being admitted as exhibit 3, the exchange recorded in the transcript is this:

3. [40]

   Following the luncheon adjournment Mr James sought to tender the statement made by Mr Naboulsi dated 8 January 2017. The transcript reads:

4. [41]

   Mr Naboulsi then required Mr Khalil for cross-examination. The Magistrate said:

5. [42]

   The whole of the cross-examination of Mr Khalil related to the BMW X6. The evidence was relevantly as follows:

6. [43]

   After the close of the plaintiff’s case the Magistrate said:

7. [44]

   Mr Naboulsi indicated that he had only one affidavit sworn 17 June 2021. Mr James identified objections to paragraphs 11-21 but said that since Mr Naboulsi was self-represented, the better way to deal with the matter might be to deal with them as matters of weight rather than admissibility. The transcript then reads:

8. [45]

   Following that ruling, an issue arose about a document that ultimately became exhibit B. It was a screen shot of an SMS about which Mr Naboulsi briefly cross-examined Mr Khalil. The transcript reads:

9. [46]

   Mr James objected to the document as being inconsistent with the pleadings and the evidence that had been given. The Magistrate admitted the document. The date of 24 June 2022 is incorrect both in the extract above and when the document is recorded as exhibit B. The date that was accorded the document (24 June 2021) was the date it was put on the court file at a mention of the matter prior to the hearing date.

10. [47]

    The proceedings were then adjourned part heard.

11. [48]

    Mr Naboulsi points to two passages in the transcript where he says that the Magistrate erred. The first is where the interpreter said to the Magistrate at the commencement of the second day’s hearing:

12. [49]

    Mr Naboulsi submitted that at that point he was seeking permission from the Court to have the documents go into evidence.

13. [50]

    The second challenge is to what the Magistrate said after the parties had had the opportunity to inspect the documents produced under the subpoena. Mr Naboulsi submitted that instead of the Magistrate saying “It depends very much on what the defendant does with the documents, if anything, doesn’t it?”, his Honour should have determined the objection that Mr James was making and, in failing to do so, there was an error of law. As noted earlier, Mr Naboulsi submitted that if the documents had gone into evidence they would have raised a significant credibility issue about Mr Khalil’s evidence, because he had denied in cross-examination that he was the registered owner of the car. The documents showed that he was the registered owner for a period of time.

14. [51]

    Mr Naboulsi submitted that, rather than the Magistrate saying that it depended on what the defendant did with the documents, he ought to have addressed Mr Naboulsi himself and asked him what he intended to do with the documents.

15. [52]

    There was some debate at the hearing of the appeal about what Mr Naboulsi (through the interpreter) meant when the interpreter said, “I need the permission of the Court”. Since the proceedings had been stood over part-heard, it was irregular of Mr Naboulsi, first, to have issued and served a subpoena for documents , secondly not to have given notice to the other party and, thirdly, without the leave of the Court. When everyone, including the Magistrate, appeared to be hearing about the subpoena and the subpoenaed documents for the first time, and no-one had yet had access to them, it is not reasonable to conclude that the words, “I need the permission from the Court”, meant that Mr Naboulsi was seeking to tender the registration documents. The Magistrate’s reaction suggest that he interpreted what was asked as being leave to call on the subpoena.

16. [53]

    But if there was any doubt about what Mr Naboulsi was seeking, what followed make clear that he could not have been tendering anything at that point, because time was then given to Mr James to look at the subpoena and take instructions about whether he objected to it. Thereafter, the Magistrate gave access to the parties with Mr Naboulsi having first access.

17. [54]

    After that had been done, Mr James raised some matters of prejudice, including an entirely appropriate reference to the principle in Browne v Dunn. His witnesses had been cross-examined, these documents had not been put to them, and Mr Khalil had closed his case. The Magistrate then interrupted Mr James to say that what might happen depended on what Mr Naboulsi did with the documents. Mr James agreed, saying twice that it depended on what the defendant did with the documents. It was only immediately before this part of the transcript that Mr Naboulsi had actually seen the documents.

18. [55]

    By this stage of the trial, Mr Naboulsi had been given explanations about procedure including in relation to tendering documents. He had tendered a document obtained from the court file (see at [45] above). Moreover, Mr James had tendered a document which had been produced on subpoena (see at [39]-[40] above). The concept of tendering documents could not, by this stage, be something that was considered foreign to Mr Naboulsi. He had been asked what material he wanted to tender. At the end of his cross-examination, he was asked if that was the close of his case.

19. [56]

    Despite all of this, Mr Naboulsi did not tender the registration documents. There was no failure on the Magistrate’s part to admit them because they were never tendered.

20. [57]

    In those circumstances, I do not consider that the Magistrate was obliged to say anything further to him about them, or to ask Mr Naboulsi specifically, as has been submitted, what he intended to do with the documents. In my opinion, that would have been overstepping the line between neutrality and assistance to one side. In Norbarani, the High Court approved at [47] what Samuels JA said in Rajski v Scitec Corporation Pty Ltd (unreported, Court of Appeal, NSW, 16 June 1986) at 27:

21. [58]

    There was no denial of procedural fairness in the way the Magistrate conducted the hearing, including in relation to the registration documents. The Magistrate had appropriately provided all of the assistance necessary to assist Mr Naboulsi as an unrepresented litigant.

22. [59]

    If I am wrong in concluding there was no denial of procedural fairness, there was no substantial miscarriage or wrong: Balenzuela v De Gail (1959) 101 CLR 226 at 235; [1959] HCA 1. What must be shown is that the person was deprived of the possibility of a successful outcome. To negate that outcome, the Court would need to find that a properly conducted trial could not possibly have produced a different result: Stead v State Government Insurance Commission (1986) 161 CLR 141 at 147; Nobarani at [38].

23. [60]

    The only matter which the registration documents went to was whether Mr Khalil had ever been registered as the owner of the BMW. He said that he had not. The documents showed that he had been. That arguably affected his credit. There was no issue that he had the use of the vehicle, but he denied it was for any form of security.

24. [61]

    The documents tended to show that the car was transferred to him in June 2016, long before the loan to Mr Naboulsi. They also show that Mr Khalil transferred the vehicle to Patricia Butler before the loan was repaid. That was inconsistent with the BMW being provided to him as security. The documents also show that the prior owner was not Mr Omar as Mr Naboulsi alleged.

25. [62]

    Further, the Magistrate found that Mr Naboulsi’s account of the loan was inconsistent with what he told the police in his statement to obtain the ADVOs in a number of respects. The account in the police statement accorded with Mr Khalil’s evidence. The Magistrate found that the revs.com.au document did not support Mr Nabousli’s case that Mr Khalil had written the BMW off and obtained the insurance money. The Magistrate noted that the defendant did not call Mr Omar to corroborate Mr Naboulsi’s case that it was Mr Omar who borrowed the money and provided the BMW as security.

26. [63]

    The evidence in the case overwhelmingly supported Mr Khalil’s case. The registration documents proved only that Mr Khalil was wrong that he never became the registered owner of the BMW. However, by virtue of the date he became the registered owner, his ownership had no connection with security for the loan, which had not then been made, and his ownership ceased prior even to his first demanding repayment of the loan.

27. [64]

    In my opinion, Mr Naboulsi was not deprived of the possibility of a successful outcome by the absence of the registration documents in the proceedings as a result of any denial of procedural fairness.

28. [65]

    Although grounds of appeal involving questions of mixed fact and law ordinarily require more than error to be demonstrated (Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[37]; John Maiolo t/as M & N Peninsular Kitchens & Joinery v Chiarelli [2017] NSWSC 982 at [29]-[31]), this matter does not arise in circumstances where the grounds fail, in any event.

29. [66]

    I would reject all of the grounds of appeal.

Conclusion

1. [67]

   I make the following orders: