Alexander v Blue Pie

[2008] NSWSC 189

CITATION:	Alexander v Blue Pie [2008] NSWSC 189
HEARING DATE(S):	15 November 2007 & 12 December 2007
JUDGMENT DATE :	7 March 2008
JURISDICTION:	Common Law
JUDGMENT OF:	Harrison AsJ
DECISION:	(1) The judgment and orders of the Magistrate are affirmed except so far as the quantum of judgment on the cross claim and the sum awarded for interest. (2) The parties are to bring in short minutes to reflect the changes to the Magistrate’s judgment and orders. (3) Costs are reserved.
CATCHWORDS:	APPEAL - Local Court Magistrate - whether there was a fair trial
LEGISLATION CITED:	Local Courts Act 1982
CATEGORY:	Principal judgment
CASES CITED:	Botany Bay City Council v Rethmann Australian Environmental Services Pty Limited [2004] NSWCA 414 Gorczynski v Beilby [2005] NSWSC 884 Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 Jones v National Coal Board [1957] 2 QB 55 Jung v Son (Unreported, NSWCA, 18 December 1998 Kojima Australia Pty Ltd v Australian Chinese Newspapers Pty Ltd [2000] NSWSC 1153 Municipality of Burwood v Harvey (1995) 86 LGERA 389 Pettitt v Dunkley (1971) 1 NSWLR 376 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Stoker v Adecco Gemvale Constructions Pty Ltd & Anor [2004] NSWCA 449 Swain v Waverley Municipal Council (2005) 220 CLR 517 Wakim v Mathiew Pty Ltd t/as Dove Migration Services [2002] NSWSC 405
PARTIES:	Geoffrey Alexander t/as Digital Mastering Soluctions (Plaintiff) Blue Pie Productions Pty Ltd (Defendant)
FILE NUMBER(S):	SC 12568/2007
COUNSEL:	DM MacFarlane (Plaintiff) MJ Hogg (Defendant)
SOLICITORS:	Houston Dearn O'Connor (Plaintiff) Triumph Legal Services (Defendant)
LOWER COURT JURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	1334/05
LOWER COURT JUDICIAL OFFICER :	Pierce LCM
LOWER COURT DATE OF DECISION:	22 February 2007

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ASSOCIATE JUSTICE HARRISON

FRIDAY, 7 MARCH 2008

12568/2007 - GEOFFREY ALEXANDER t/as DIGITAL
MASTERING SOLUTIONS v BLUE PIE
PRODUCTIONS PTY LTD
JUDGMENT (Appeal decision of Local Court Magistrate
- whether there was a fair trial)

1 HER HONOUR: By second amended summons filed 2 November 2007, the plaintiff appeals from the decision of His Honour Magistrate Pierce made in the Burwood Local Court on 22 February 2007 pursuant to s 73 of the Local Courts Act 1982. He seeks orders that firstly, the decision in relation to the quantum of the claim and in relation to the whole of the cross claim be set aside; secondly, that the plaintiff be awarded $19,244.14 plus costs; thirdly, that the cross claim be dismissed; and fourthly, in the alternative, that the proceedings be remitted to the Local Court, differently constituted, to be heard and determined according to law, on the question of quantum of the claim and for the whole of the cross claim.

2 The plaintiff is Geoffrey Alexander t/as Digital Mastering Solutions (Mr Alexander). The defendant is Blue Pie Productions Pty Ltd (Blue Pie). Mr Damien Riley is the director of Blue Pie and gave evidence on behalf of Blue Pie in the Local Court. Mr Alexander relied on two affidavits of Maria Linkenbegh sworn 14 June 2007 and 29 October 2007. Mr Alexander also gave evidence in the Local Court.

3 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiff. Section 73 of the Local Courts Act permits a party who is dissatisfied with a judgment as being erroneous on a point of law to appeal to this Court. The onus lies on the plaintiff to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor [1995] Aust Torts Reports 81-354; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156; Carr v Neill [1999] NSWSC 1263 and R L & D Investments Pty Ltd v Bisby (2002) 37 MVR 479; [2002] NSWSC 1082. The judicial officer cannot act on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588.

4 In Swain v Waverley Municipal Council (2005) 220 CLR 517, the Chief Justice at [2] reiterated that in the common law system of civil justice, the issues between the parties are determined by the trial process. The system does not regard the trial as merely the first round in a contest destined to work its way through the judicial hierarchy until the litigants have exhausted either their resources or their possibilities of further appeal.

5 Section 75 of the Local Courts Act provides that the Court may determine an appeal either (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 Court for determination in accordance with the Supreme Court’s directions, or (d) by dismissing the appeal.

6 On 22 February 2007, the Magistrate ordered firstly, that there be judgment for the plaintiff on the claim for $7500; secondly, judgment for the cross claimant on the cross claim for $45,000 to be said within 28 days; thirdly, interest to the defendant/cross claimant on $37,900 from 31 August 2006 calculated at $1699.79; and fourthly, that the plaintiff was to pay the defendant’s costs as agreed or assessed. The Magistrate noted that costs were to include the defendant’s costs, if any, of the cross claim before the Arbitrator, but the defendant was to pay the plaintiff’s costs as ordered by the Arbitrator.

Grounds of Appeal

7 Mr Alexander appeals the whole of the decision of his Honour Magistrate Pierce dated 22 February 2007. There are numerous grounds of appeal which have been refined in submissions. They primarily relate to the conduct of the trial and whether, firstly, Mr Alexander was denied a fair trial or denied procedural fairness such that he did not have a trial according to law; secondly, whether Mr Alexander was denied procedural fairness or the Magistrate otherwise erred in law in relation to his judgment on the quantum of Mr Alexander’s claim; and thirdly, whether Mr Alexander was denied procedural fairness or the Magistrate otherwise erred in law in relation to his judgment on the quantum of Blue Pie’s claim.

8 In relation to appeal ground 2(e) it was conceded by Blue Pie that the Magistrate erred by triple counting the head of damage called “External Programming costs and voice overs” in paragraphs [32], [35] and [36] of this judgment. This means that the Magistrate erred in awarding the amount of $45,500 of which $13,000 has been deducted and Mr Alexander must succeed in his appeal in that respect.

The pleading framework in the Local Court

9 On 29 November 2005, Mr Alexander filed an amended statement of liquidated claim (ASC) claiming the amount of $19,244.14 plus interest and costs.

10 The ASC alleged that Mr Alexander and Blue Pie entered into a number of agreements in 2005 relating to the provision by Mr Alexander of internet radio set up and maintenance services by the plaintiff. These agreements were said to include:

(1) An agreement on or about 6 June 2005 whereby the plaintiff would set up the Rabbitohs Radio internet radio stated (Rabbitohs Radio) (ASC [4]-[4.1]) on the terms set out in [4.3] of the ASC;
(ii) An agreement on or about 17 June 2005 whereby the plaintiff would set up the Hawks Radio internet radio station (Hawks Radio) and provide content management services for Hawks Radio (ASC [51.]-[5-2] on the terms set out in 5.3 of the ASC;
(iii) An agreement that the plaintiff would provide the defendant with content management and production services as required by the defendant (ASC [6]).

11 Mr Alexander alleged that he performed his obligations under each of the above agreements and that he issued monthly invoices pursuant to the above agreement and Blue Pie failed to pay those invoices (ASC [4.4], [5.4], [5.5], [6.1] and [6.2].

12 On 30 September 2005 Blue Pie filed a defence in which it admitted that it owed $11,913 on the basis that it had terminated the Hawks Radio agreement. It sought a monthly payment plan of 4 monthly payments of $2,978.25 (Aff, Alexander - 22/01/207).

13 On 8 December 2005, Blue Pie filed an amended defence. Blue Pie advised that the plaintiff was to be put to proof that the plaintiff ever supplied the services in accordance with the contract. Blue Pie alleged that none of the plaintiff’s work existed on the defendant’s network and/or had been destroyed by the plaintiff; and that as a consequence the defendant has suffered damage likely to exceed $50,000.

14 On 31 August 2006, Blue Pie filed a cross claim seeking, relevantly:

(1) The agreement between the plaintiff defendant was entered into on or about 21 March 2005, under which the plaintiff was to provide services to the defendant for various radio stations [2] on the terms set out in [3];
(2) That there was an express or implied term to the effect that the plaintiff would not detrimentally affect the radio station content or functioning [4];
(iii) That pursuant to an agreement on 2 June 2005, the defendant provided the plaintiff with a security code to access and make amendments to the content of all of the internet radio station kept on the Live 365 server [5];
(iv) That “in breach of the Agreement [the plaintiff] used his security code on or about 14 October 2005 to remove the content and/or impaired the functioning of all of the internet radio stations” [6].

15 The cross claim pleaded concurrent liability in negligence [8] and [9] and that as a result of the breaches of contract and duty of care Mr Alexander caused Blue Pie damage which included the cost of rebuilding internet radio stations, loss of profits and loss of business opportunities.

16 On 20 November 2006 the defence to the cross claim was filed which relevantly pleads:

(i) the plaintiff denied that the log-on code was provided by the defendant, and says it was provided by Live 365;
(ii) the plaintiff alleged there was no content to delete as it was a live server and that when the defendant failed to pay the plaintiff’s tax invoice the plaintiff suspended his services under the agreement being the content stream to Live 265 [6].

17 At the hearing of this appeal, counsel for Mr Alexander referred to specific portions of the transcript and submitted that individually and cumulatively the result was that there was excessive intervention by the Magistrate during the hearing such that there had been a denial of procedural fairness. The approach this Court has taken on this appeal is to carefully read the whole of the transcript of the Local Court hearing before reaching a decision.

18 It should be borne in mind that throughout the hearing of the proceedings in the Local Court neither counsel raised any objection as to the way the trial was being conducted by the Magistrate. As hearing time became short, counsel agreed on certain procedures in order to expedite the hearing.

The hearing in the Local Court

19 At the commencement of the hearing the Magistrate identified the pleadings and affidavits that were on the court file. He took an adjournment for 15 minutes in order to read these documents. At the outset, it is important to appreciate that the subject matter of these proceedings involved specialised technical knowledge concerning the flow of audio text to an internet radio station. This knowledge was to a large extent possessed by the witnesses, Mr Alexander and Mr Riley. Counsel for both parties and the Magistrate did not possess that level of specialised knowledge and understanding. In the absence of any independent expert evidence, the explanations as to the working of internet streaming had to be elicited from the witnesses. In fact, Mr Wilson counsel representing Blue Pie, suggested that given the nature of the case it may be appropriate for both sides to give some oral evidence because of the complexity of the computer “stuff”. Mr Johnson counsel for Mr Alexander said, “I’m happy with that.”

20 Mr Alexander as plaintiff gave evidence first. He relied on his affidavit dated 22 January 2007. The outstanding invoices and the letter of demand (Exs 1 & 2) were tendered without objection. The Magistrate sought clarification as to whether the only issue in dispute were whether Mr Alexander pulled the plug using his security codes and if he did what was the effect of this action.

21 Counsel for Blue Pie, Mr Wilson stated that the only issue was with Mr Alexander proving his case on quantum in that he was claiming six months worth of work and yet by his own pleadings he had only done 2½ months worth of work (t 8.39-42). The Magistrate then asked Mr Alexander how live streaming from his computer over the internet worked. Mr Alexander explained it this way:

“A play up computer, it’s just basically a computer that plays the audio, it plays the events in a sequence, it is then sent via the internet to Live 365, at which time they allow it to be connected on by the audience in order to be sent out, so it’s a live continuous stream.” (t 10.10-14)

22 Mr Alexander said that if he turned off his computer, it all stopped. If he pressed “stop” on his computer that stopped the audio stream from his computer but it did not actually delete any files (t 10.53). Mr Alexander considered that it was possible for Blue Pie to reconstruct the metadata from the schedule and metadata so that Blue Pie could put it into another program and send it out on another stream but this would take one to three days to complete (t 11). After the Magistrate had ascertained this information from Mr Alexander, his Honour said to his counsel “Okay, back to you” Mr Johnson replied, “I don’t think I’ve got anything else.” (t 11.57). It is my view that at this stage the Magistrate was trying to ascertain the issues in dispute and elicit the evidence in a manner which seemed to him to be the most expedient. The Magistrate asked question of Mr Alexander.

23 Counsel for Blue Pie Mr Wilson cross examined Mr Alexander. It was unremarkable. From questions the Magistrate asked of Mr Alexander at t 17.40 and t 19.1, his Honour was making sure he understood his evidence. At the end of cross examination, there was no re-examination by Mr Alexander’s counsel. Mr Alexander’s case was then closed.

24 Next, Mr Damien Riley director of Blue Pie gave evidence. Mr Riley relied upon the contents of his affidavits sworn 31 July 2006 and 30 January 2007. His counsel attempted to have a document admitted into evidence but as the plaintiff objected to it, the Magistrate said, “Your friend objects to that document you cannot get it in.” (t 34.14). It became clear as Mr Riley’s evidence continued that there was a “fundamental disagreement” as to whether Live 365 was a live stream or, as Mr Riley was maintaining, a hosted stream. Mr Riley later gave evidence that some part were live and some parts were hosted. This evidence seems to be inconsistent.

25 The Magistrate enquired as to if there was someone senior with Live 365 who could resolve the issue of whether the stream was live, hosted or a mixture of live and hosted streams (t 35.42). Mr Riley said that they could resolve this dispute. The Magistrate then enquired as to whether both counsel could, by agreement, phone Live 365 in California to ascertain whether there was loaded up material that came across, sat on their own stream, or alternatively if there was a stream which originated in Australia and nothing else happened. Both parties agreed that they would make the telephone call during the luncheon adjournment (t 37.20). The lunchtime attempt to make contact Live 365 was unsuccessful.

26 During the cross examination of Mr Riley by Mr Johnson, Mr Riley admitted that he had access to files that were stored on the server for each of the respective radio stations (the Rabbitohs and Hawks). Mr Riley gave evidence that when he accessed the Live 365 website on about 14 October all the station files were all gone (t 39.33). He was then asked whether for the purpose of proving his cross claim had he sought or provided any of this material that showed this material been deleted from the website (t 40.55). He said that he had it with him and counsel for Mr Alexander called for its production. Mr Johnson sought access to the three documents which were then produced. The Magistrate granted access. When Mr Riley was asked whether he had any idea of how Mr Alexander was organising the audio information coming to the Live 365 server, he replied, “… he would send me through logs of what he had programmed and he would also send me through confirmations of what he loaded to the stations in MP3 files for the broadcast mode.” The next question was “And these are the hundreds of emails that you spoke of earlier?” The answer was in the affirmative. Mr Johnson, for Mr Alexander, then called for the hundreds of emails to be produced. Counsel for Mr Riley answered, “Not produced, they’re not here.” (t 42.45-58).

27 As previously stated, Mr Riley then in cross examination, agreed that Mr Alexander provided two services, live streaming and hosted stream (t 43) which was inconsistent with his earlier evidence.

28 After Mr Riley again referred to the hundreds of emails the Magistrate enquired as to whether he had any of them with him. The witness and his counsel replied that the emails were located partly in the barrister’s chambers and partly at Mr Riley’s office. Mr Wilson, counsel for Mr Riley, offered to call his clerk and have the documents brought to court as soon as possible. The following exchange then took place (at t 44):

“HIS HONOUR: No, but if you can get them here it’ll overcome the problems won’t it?
JOHNSON: Well it would’ve but this has been in the process, there’s already been one action, this is another action, and what we’re now – here we are, what the best part of two years after the event, and now saying “Oh I’ve got them”. We’ve had two years whereby on the cross claim if this was an issue as to what was loaded on the 365.com server one might have thought this information would’ve been here now.
HIS HONOUR: I know, I know, but if you can get them here.
JOHNSON: Well your Honour I’m in your Honour’s hands as to how this is conducted but now we’re going to, perhaps, receive some other information which may not take us anywhere, and it should’ve been here. If it – this is their cross-claim after all.
HIS HONOUR: Yes. Well excuse me for a minute. Mr Wilson, your friends got a point hasn’t he, why the devil isn’t the stuff here?
WILSON: Well with respect your Honour I wasn’t expecting my friend to call for that material.”

29 Mr Wilson explained that it was not part of the way that he was conducting the case. It was Mr Wilson’s view that access was the fundamental issue and the issue was not that Mr Alexander would say that the material was only streamed (t 45.37).

30 Cross examination continued. Mr Riley’s latter affidavit contained a power point document that had crucial points in it about how the station worked and this was referred to in cross examination. The Magistrate and the counsel approached Mr Riley who was in the witness box so he could provide an explanation in relation to entries on the document. At one point Mr Johnson said, “This is a submission” and the Magistrate stated, “Not really, he is just telling me what it means.” After the next answer the Magistrate agreed with Mr Johnson that they were submissions and that “he saw that before.” (t 52.57). By that comment it seems to me that the Magistrate referred to something written on the document which amounted to a submission.

31 The Magistrate asked questions of the witness with a view to work out what part of the streaming was live mode and what part of it was in broadcast mode. The live mode was the live game call with two commentators. Mr Johnson, still during cross examination asked Mr Riley whether he could produce some documents which showed what was or allegedly was stored on the server before 1 October 2005. Mr Riley had conceded that he had not paid certain of the accounts rendered by Mr Alexander. The Magistrate asked Mr Riley whether he could make a concession as to how much of the plaintiff’s claim he had not paid. Mr Riley answered that it would be around $7,500-$8,000 because Mr Alexander had not completed the work in relation to the Hawks Radio Station (t 60.20). This reflects a departure from the concession in the defence that Blue Pie owed the sum of $11,913.

32 The evidence was given largely without any objection. One objection was raised by counsel for Mr Alexander (at t 68). In relation to that objection the Magistrate agreed that the word “material” in the question was too wide. The documents subject to the call had arrived during cross examination. The cross examination concluded.

33 Mr Wilson of Counsel re-examined his client Mr Riley. The issue of Mr Riley diverging when giving evidence from the witness box occurred again (t 74-75). The Magistrate (at t 75.1-6) agreed with Mr Johnson that what his counsel (Mr Wilson) was trying to do was to get the witness to provide a summary of the evidence he had given. That approach by counsel was then abandoned.

34 During the re-examination of Mr Riley, the Magistrate enquired as to whether the documents had arrived at court. The documents were produced. At that stage it was acknowledged that counsel for Mr Alexander had not yet had the opportunity to inspect them. When his Honour was advised that the documents had arrived at court he stated that Mr Johnson might want to ask further questions (t 75.24). From the transcript it seems that the bundle of documents consisted of some 150 to 200 pages, some of which had been flagged. When the documents were handed over to counsel for Mr Alexander, counsel for Blue Pie drew Mr Johnson’s attention to the yellow tabs and suggested if he looked at those first it may make his job a bit easier.

35 As the afternoon adjournment was drawing near, the approach that was agreed upon by the parties and the Magistrate was that Mr Riley would go through the documents and identify the important documents and they would be the ones that his counsel would seek to tender (t 77-78). The Magistrate took a short adjournment while this Mr Riley went through the documents.

36 After the adjournment, five documents were tendered (Exs 3-7) without objection. Mr Wilson asked some short questions in relation to each of them. After Ex 7 was tendered, Mr Wilson said “I’m conscious of the time and it would go over part heard.” His Honour asked whether there were a lot more documents. Mr Wilson replied that there were but they fundamentally went to the same issue namely that there was live streaming and broadcast. Mr Alexander’s counsel said, “There’s no objection” and he indicated that his preference was that the matter did not go over part heard (t 81.1). Mr Riley’s counsel anticipated that there were another 20 documents to go. Exhibit 5 was tendered and admitted without objection.

37 The Magistrate suggested that it might be quicker if Mr Wilson did not tender any more of those documents and let Mr Johnson ask questions about those documents and any others, if he wanted to. Counsel for Mr Riley tendered two more documents (Exs 9 and 10), which were admitted into evidence without objection. Mr Johnson objected to the next two documents. After counsel for both parties spent some time arguing whether these two documents were relevant, Mr Johnson asked the Magistrate to have a look at the documents before making a ruling. The Magistrate acceded to this request and decided that the documents were relevant. They were admitted following objections and marked Exs 11 and 12. Exhibits 13 and 14 were admitted without objection. The Magistrate rejected the tender of the last document. At the end of this tender process, the Magistrate asked counsel for Mr Alexander whether he wanted to “ask any questions about these things” Mr Johnson replied, “Your Honour no, I think I can adequately deal with it.” (t 87.19-20). The case was closed for the defence.

38 Each party was given a short time to make its submissions. Counsel for Blue Pie went first. He summarised the issues in dispute namely that it was being asserted that Mr Alexander accessed the Live 365 site and removed material and that the only two people who had access codes were Mr Alexander and Mr Riley. Mr Wilson referred to evidence that supported his client’s case and summarised that the two aspects of Mr Alexander’s claim were firstly, the setting up of the two stations and that he pulled them down by accessing the data; and secondly, although Mr Alexander claimed that he did maintenance for six months, he actually did it for only 2½ months (t 88.50). When the Magistrate asked whether he would argue with the figure of $7,500, Mr Wilson replied that he would not. In relation to the cross claim, Counsel for Blue Pie asserted that only Mr Alexander could have pulled down the material. When asked by the Magistrate as to how much Blue Pie was claiming, he replied “just short of $37,000.”

39 When it was counsel for Mr Alexander’s turn for submissions, the Magistrate at the outset stated (t 89.41-54):

“Mr Johnson just to help you, there’s a mass of these emails and what not here, many of them I know refer to words like upload, which might only mean upload on your client’s computer here in Sydney, but some of them plainly do not. For example exhibit 4, which says, this is from Mr Alexander, your client, to Mr Riley, and it says “Damien, just letting you know I’ll be running Rabbitohs between 8am and 10pm as a live station, in other words everything between those times will be streamed from my computers, at other times it’ll be run from Live 365.” Doesn’t that really, on the face of it, that’s one of the better examples that tends to run against your client’s assertion that he only ever streamed. Unless there’s something I’m missing badly somewhere.”

40 Mr Johnson replied “I’ll put that to one side and I accept what’s contained in the document.” Mr Johnson submitted that the problem with the material is that “we are told data’s missing but we just – not told what it is that is missing and therein lies the problem with the cross claim.” After making further submissions, Mr Johnson admitted that he was trying to give evidence from the bar table and considered whether he should seek to re-open his case and call further evidence from Mr Alexander. He elected not to seek to recall Mr Alexander.

41 There was an exchange between the Magistrate and Mr Johnson as to what were the possible explanations for the contents of certain emails. When Mr Johnson made a submission that one took the position that there was one explanation namely that the data was with Live 365, the Magistrate pointed out that there were emails by Mr Riley to Live 365 which had Live 365 hunting around for days to see what had happened to the data. Mr Johnson submitted that “would not be the first conclusion he would come to” and might have expected Mr Riley to make some enquiries of Mr Alexander. Counsel then pointed to the lack of evidence as to what was on the website and that Blue Pie had run dead on that issue.

42 On the claim, counsel for Mr Alexander asked the Magistrate to accept the evidence of Mr Alexander that he set up the sites and he maintained those sites for six months and that was no real argument about that issue. He concluded by saying, “…they are the matters I wish to put before you.”

43 The Magistrate stated that he proposed to give judgment for the defendant on the cross claim. Mr Johnson interrupted and said “Would your Honour hear me on that, I’m not cavilling with your ruling.” It had occurred to Mr Johnson that he wished to address on one aspect of quantum. The Magistrate then gave an ex tempore judgment, leaving aside the amount of quantum so that there would be opportunity for Mr Johnson to raise whatever he wanted to say in that regard.

44 The Magistrate in his ex tempore reasons stated:

“As for your claim it cannot be that your client can rely on any portion of what he did beyond 1 October, or 1 October and beyond, from 1 October, because he himself fundamentally breached the contract at that point by pulling everything off the air, I think. I accept that he removed material, on the balance of probabilities that is what I find, and I find it on the basis that the defendant, pretty reliably and believably, says so, and indications to the evidence, such as exhibit 4, such as the attachment to his affidavit, the email from Live 365, suggest it, his credibility is bolstered, in my view, by the last matter I mention a minute ago, namely that the fact that he sort of started a witch hunt over in California to try and have them over there find out what had happened, which he would not have done unless he thought everything was, or a lot of stuff was up on the site. It doesn’t matter precisely what was on the site the point is everything was wiped out and it all had to be redone.
The plaintiff must succeed as to seven and half thousand dollars, because that much is conceded, but he cannot succeed beyond that. He also made performance impossible from then on, the instance of opponent by wrecking the site, that’s what plainly happened. So there will be two separate judgment of course, because there is no set-off.
There will be a judgment of the plaintiff for seven and a half thousand dollars on the claim.”

45 His Honour turned to consider the quantum of the cross claim and asked what the amounts added up to. Mr Wilson did the arithmetic and replied $45,000 from looking at paras [32], [35] and [36] of the affidavit. Mr Johnson did not say anything. The Magistrate relied upon Mr Wilson’s arithmetic. This was a mistake. This was followed by a brief argument as to costs.

46 Judgment was given for the cross claimant on the cross claim in the sum of $45,400.

Procedural fairness in the Local Court

47 In Wakim v Mathiew Pty Ltd t/as Dove Migration Services [2002] NSWSC 405, O’Keefe J made the following observations:

“20 The requirements of natural justice (or procedural fairness as it is now commonly referred to) apply to the Small Claims Division of the Local Courts. This is clear from the nature of the function to be performed by that tribunal and the statutory recognition that is afforded to natural justice by s 69(2A) of the Act.
21 The content of the requirements of natural justice is not fixed. The content fluctuates. The overarching requirement is that of fairness (National Companies and Securities Commission v News Corporation Ltd (1984) 156 CLR at 312 per Gibbs CJ with whom Brennan J agreed). For a court that normally involves a duty to:
(i) act judicially;
(ii) deal with the matter for decision without bias;
(iii) give each party the opportunity of adequately presenting its case;
(iv) observe the procedural and other rules provided for in the relevant statute;
(v) come to its decision with that sense of responsibility that is the necessary accompaniment of the duty to do justice.”

48 O’Keefe J made the same comments in Kojima Australia Pty Ltd v Australian Chinese Newspapers Pty Ltd [2000] NSWSC 1153 at [23]. These comments are also applicable to the general division of the Local Court.

49 Counsel for both parties referred to numerous judgments which dealt with when the intervention by a trial judge reached a point which should attract appellate intervention. Below, I shall refer only to a few.

50 In Council of the Municipality ofBurwood v Harvey (1995) 86 LGERA 389 Kirby P (as he then was) highlighted the wide discretion a judicial officer enjoys in the conduct of court proceedings and the restraint that an appellate court should show in relation to complaints of excessive intervention. Then Kirby P continued:

“There are at least two categories of exception for the provision of relief where a court is of the opinion that excessive intervention on the part of a judicial officer has been established:
(a) The first is where the appellate court is convinced that the interventions, although excessive, did not prevent a fair trial from being had or cause a reasonable apprehension of bias to arise. …
(b) The second is where the appellate court concludes that the party complaining waived an objection to the manner of the conduct of the proceedings at trial or is estopped by its conduct from later complaining about the suggested irregularity of the trial. The earlier controversy as to whether it was open to an individual party to waive the public's interest in the conduct of a manifestly fair trial was settled by the High Court of Australia in Vakauta v Kelly (1989) 167 CLR 568. It must now be accepted that in Australia, there is no reason why "in authority or in principle a litigant who is fully aware of the circumstances from which ostensible bias might be inferred, could not be capable of waiving the right later to object to the judge continuing to hear and dispose of the case". See Vakauta, ibid, 587. There seems no reason to doubt that this principle applies in respect of objections to the way a trial has proceeded which were not raised when there was still time to retrieve the situation but were kept in abeyance until an appeal. As Blair CJ pointed out in R v Power (1940) St R Qd 111, it may perhaps be understandable that counsel will usually be reluctant unwilling to object to questioning by a judge who then has himself to decide the propriety of his own questions. But "it is not only unfair to the judge himself, but may seriously affect the (party) upon an appeal". In such cases the party affected must take courage and raise the objection. Otherwise a risk is run that the appellate court may hold that the party has waived its objection to the way the judicial officer conducted the proceedings.”

51 Later, in Municipality of Burwood v Harvey, Kirby P (at 396) explained:

“Notwithstanding the foregoing, which sustains an increasingly active role on the part of judicial officers today, a judicial officer observing the conventions of Australian Courts must conform to certain restraints which have been accepted as inherent in the judicial office and necessary to the manifestly neutral determination of a controversy in a court of law. In a well known passage in Jones v National Coal Board [1958] 2 QB 55 (CA), Lord Denning LJ, at 64, charted the limits by reference to the metaphor of the layout of the courtroom. Advocacy is for the bar table. The judicial officer sits on an elevated bench, not to promote a sense of self-importance, but to symbolise his or her removal from the fray. Such removal is designed to promote bother the appearance and actuality of neutrality and independence of the parties which are the hallmarks of the judicial office:
“The judge’s part in all this is to harken to the evidence, only himself asking questions of witnesses when it is necessary to clear up any point that has been overlooked or left obscure; to see that the advocates behave themselves seemly and keep to the rules laid down by the law; to exclude irrelevancies and discourage repetition; to make sure by wise intervention that he follows the points that the advocates are making and can assess their worth; and at the end to make up his mind where the truth lies. If he goes beyond this, he drops the mantle of a judge and assumes the robe of an advocate; and the change does not become him well.””

52 In Jones v National Coal Board [1957] 2 QB 55 Denning LJ made this memorable comment:

“If a judge, said Lord Greene [in Yuill v Yuill [1945] 1 All ER 183], should himself conduct the examinations of witnesses, “he, so to speak, descends into the arena and is liable to have his vision clouded by the dust of conflict.”

53 In Botany Bay City Council v Rethmann Australian Environmental Services Pty Limited [2004] NSWCA 414 the Court of Appeal stated at [49]:

“It follows from the foregoing that the questioning of the witnesses by her Honour and the Commissioner of which the appellant complains was far from excessive and was entirely permissible. Any criticism of that questioning is, in my respectful opinion, entirely without foundation. It follows that that questioning did not constitute a departure from the rules of procedural fairness governing the conduct of the trial by taking the case on the issue of traffic noise out of the hands of the parties; nor did it in any way come close to undermining the fairness of the trial.”

54 Mr Alexander’s counsel at the hearing of this appeal made three points in his written submissions above about the manner in which the Magistrate heard Mr Alexander’s evidence in chief. He submitted that firstly, the Magistrate’s interjections occurred while counsel was attempting to conduct the examination in chief of the plaintiff and the Magistrate’s numerous interjections were designed to have Mr Johnson conclude his examination in chief as soon as possible. The second submission on this point was that the Magistrate indicated his view that the plaintiff’s case could be regarded as proved and that the only issue was whether the plaintiff “pulled the plug using the security codes” which the pleadings alleged happened on or about 14 October 2005 and that this fundamentally affected how counsel for the plaintiff conducted the trial. The third point was that counsel for Blue Pie repeated the concession that had been made on two occasions previously that the amount owing to the plaintiff was $11,913. In relation to the sum of $11,913, that concession was made in the defence. An amended defence was filed and that pleading, in effect, withdrew that concession.

55 Counsel for Mr Alexander, on this appeal, submitted that as it was Mr Johnson who called for the documents to be produced, Blue Pie should not have been permitted to tender the documents and that Mr Alexander’s counsel did not have an adequate opportunity to review and decide for himself whether to take objection to the documents. Further, according to counsel on this appeal, the plaintiff had not had the opportunity to give evidence in reply.

56 It is my view that although the documents were produced late, they were produced in response to a call by Mr Alexander’s counsel. Mr Johnson was given a reasonable opportunity to inspect them. The Magistrate gave Mr Johnson an opportunity to ask further questions if he wished to recall his client to deal with those extra documents but counsel decided that he could adequately deal with these issues in his submissions.

57 Mr Riley may have changed his evidence in relation to live and hosted broadcast but the critical issue was whether the data was removed and if it was by whom. While the evidence of Mr Alexander and Mr Riley were in conflict, and their credibility was in issue, there were emails to back up Mr Riley’s contention that the data had been lost (see Annexures 7 & 8, Aff Riley). There were only three entities that could have removed the data, Mr Alexander, Mr Riley and possibly Live 365. It was open to the Magistrate to find, as he did, that Mr Alexander removed the data.

58 Even though the defence conceded Blue Pie owed $11,913, this defence was superseded by the amended defence which in effect withdrew the concession. Mr Riley gave evidence that Mr Alexander did only 2½ months work (not six as claimed by Mr Alexander). Mr Riley admitted that he owed some money due under the invoices. In response to a question from the Magistrate, he estimated the amount Blue Pie owed to be in the range of $7,500 to $8,000. The Magistrate accepted that Blue Pie owed Mr Alexander the sum of $7,500 and entered judgment accordingly. The Magistrate was entitled to take this approach.

59 While it is fair to say that the Magistrate took a robust line in questioning the witnesses, this came about because he seemed to have more understanding of the subject matter than counsel. The Magistrate recognised that documents were produced late and evidence was adduced from Mr Riley so he gave Mr Alexander’s counsel an opportunity to recall his client to give evidence about these matters. It is my view that the Magistrate was focussed upon bringing the proceedings to a conclusion in a fair and efficient manner. It is my view that the Magistrate did not excessively intervene in the hearing of the proceedings.

60 When the issue of whether the matter should go over part heard, it was counsel for Mr Alexander who said that he would prefer that it did not. Both parties were given a reasonable opportunity to present their case and make submissions. Procedural fairness was afforded to the parties.

61 So far as whether there were adequate reasons, it is my view that the Magistrate made clear what he was deciding and why (see Pettitt v Dunkley (1971) 1 NSWLR 376; Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 Mahoney JA (at 385–6); Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Stoker v Adecco Gemvale Constructions Pty Ltd & Anor [2004] NSWCA 449 per Mason P, Sheller and Santow JJA; Gorczynski v Beilby [2005] NSWSC 884 Kirby J at [96-97]); and Jung v Son (Unreported, NSWCA, 18 December 1998).

62 Mr Alexander further submitted in this appeal, there was no adequate reasons for the assessment of quantum in the cross claim. The Magistrate accepted the calculations of damages set out in paras [32], [35] and [36] of Mr Riley’s affidavit. The only problem was that the Magistrate relied on counsel’s arithmetic, which was wrong. Adjustments need to be made to correct this error.

63 This appeal was really an attempt to relitigate the hearing in the Local Court but with the view to improving on the first round.

64 The appeal is allowed so far as there is a conceded error in the calculation of the amount payable on the cross claim. Consequently, the amount awarded for interest, namely the sum of $1699.78 is affected and needs to be recalculated. The judgment and orders of the Magistrate are affirmed except so far as the quantum of judgment on the cross claim and interest are concerned. The parties are to bring in short minutes to reflect the changes to the Magistrates judgment and orders.

65 Costs are reserved.

The Court orders:

(1) The judgment and orders of the Magistrate are affirmed except so far as the quantum of judgment on the cross claim and the sum awarded for interest.

(2) The parties are to bring in short minutes to reflect the changes to the Magistrate’s judgment and orders.

(3) Costs are reserved.
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