Kidd v Regional Skills Training Pty Ltd - [2019] SASC 144

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
KIDD v REGIONAL SKILLS TRAINING PTY LTD
[2019] SASC 144
Judgment of The Honourable Justice Hinton
15 August 2019
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
The appellant and the respondent entered into a contract for the delivery of a national educational course in agronomy. The course was delivered in the period commencing July 2010 and concluding December 2011.
On 28 October 2011 the appellant presented the respondent with an invoice for expenses incurred in the 12-month period commencing July 2010. On 30 January 2012 the appellant presented the respondent with a second invoice for expenses incurred in the six-month period commencing July 2011. The respondent declined to pay the two invoices which led the appellant to institute proceedings in the Magistrates Court for breach of contract.
The appellant’s pleaded case was that the respondent was liable to pay the sum of the amounts featured in the October 2011 and January 2012 invoices, being $52,662.00. At trial, however, the appellant abandoned his pleaded case and adduced numerous invoices, totalling $48,776.00, which he said constituted his unpaid operating costs for which the respondent was liable to pay. The claim was further refined to seek only those expenses contained in a Schedule of Accounts provided by the appellant’s counsel in the course of closing submissions which constituted a reworked and filtered version of the invoices. The respondent conceded that whilst the appellant was entitled to his reasonable expenses it denied that any of the invoices adduced by the appellant constituted reasonable expenses.
The Magistrate dismissed the appellant’s claim. In the course of doing so the Magistrate refused to sift through the invoices tendered by the appellant to determine which were a reasonable expense and which were not. The Magistrate remarked that to do so would be no part of the court’s function.
In this Court the appellant submitted that the Magistrate should have found that the appellant was entitled to reimbursement for reasonable expenses incurred and in the light of that finding should have determined which of the invoices tendered constituted a reasonable expense for which the respondent was liable. The respondent contended that it was clear from the Magistrate’s reasons that he did not form the view that there was any contractual term between the parties that meant the appellant was entitled to reimbursement for his normal operating expenses and in any event there was no evidence sufficient to make out a claim by the appellant for any office expenses.
Held, dismissing the appeal, whilst a case may be run different to the pleadings without amendment by consent express or implied, this was not such a case. The Magistrate was right to conclude as he did and to hold that the forensic contest was not one that required that he assess each invoice tendered and included in counsel’s schedule for the purpose of determining whether it was a reasonable expense.
Banque Commerciale SA (In liq) v Akhil Holdings Ltd (1990) 169 CLR 279; Gould v Mount Oxide Mines Ltd (1916) 22 CLR 490, considered.

KIDD v REGIONAL SKILLS TRAINING PTY LTD
[2019] SASC 144
Magistrates Appeal
HINTON J:
Introduction

The appellant, Charles Kidd, and the respondent, Regional Skills Training Pty Ltd (Regional Skills or the respondent), contracted for the delivery of an educational course in agronomy. Mr Kidd possessed expertise in the area of agronomy but did not possess the necessary regulatory approvals that allowed him to provide an accredited course. Regional Skills was a registered training organisation possessing the desired accreditation. Accordingly, Mr Kidd approached Regional Skills and an agreement was reached for the delivery of the course to which I have referred.
In time, and after running a successful pilot program, the course was delivered in the period commencing July 2010 and concluding December 2011. On 28 October 2011 the appellant presented the respondent with an invoice for expenses incurred in the 12-month period commencing July 2010. On 30 January 2012 the appellant presented the respondent with a second invoice, this time for expenses incurred in the six months from July 2011. Regional Skills declined to pay those invoices leading the appellant to sue for breach of contract.
At trial the appellant abandoned his pleaded case and adduced numerous invoices that he said constituted his unpaid operating costs for which Regional Skills was liable. Those unpaid invoices totalled $48,776.00. The respondent conceded that the appellant was entitled to his reasonable expenses, but denied that any of the invoices adduced constituted reasonable expenses.
The Magistrate dismissed the appellant’s claim. In the course of doing so he refused the appellant’s invitation to sift through the invoices tendered as part of the appellant’s case and determine which amounted to reasonable expenses for which the respondent was liable. The Magistrate remarked that doing so was no part of the court’s function. In this Court the appellant contends that the Magistrate should have found that the appellant was entitled to reimbursement for reasonable expenses incurred and in the light of that finding, should have determined which of the invoices tendered constituted a reasonable expense for which the respondent was liable.
For the reasons that follow I would dismiss the appeal. In my view, it was not open to the Magistrate to proceed as the appellant would have.
The pleaded case
In his statement of claim Mr Kidd asserted that the contract between himself and Regional Skills was reduced to writing, such writing being the notes of a meeting held on 18 May 2010 and the budget of the same date prepared for the project. Mr Kidd claimed that he was entitled under the contract to, amongst other things, payment of his expenses. More particularly he pleaded:
6. The budget allocated expenses that would be incurred in the course of the training program by the various parties involved. The budget document “NEBPPP” and the meeting notes detailed the allocated expenses in writing and the terms of such documentation is expressed in the document “NEBPPP”.
7. The budget included operating expenses, such as:
7.1Travel and accommodation;
7.2Car;
7.3 Office consumables;
7.4 Computers;
7.5 Telephone;
7.6 Internet; and
7.7On costs.
Mr Kidd invoiced Regional Skills for operating expenses incurred by him in accordance, he contended, with the agreed budget and the terms of his contract on two occasions. On 28 October 2011 Mr Kidd rendered an invoice in the sum of $35,108.00 (inclusive of GST) for expenses incurred in the period July 2010 to July 2011. Then on 30 January 2012 he rendered a second invoice in the sum of $17,554 for expenses incurred in the period July 2011 to December 2011. In all he claimed $52,662.00 plus interest, costs and disbursements.
Regional Skills declined to pay both invoices leading Mr Kidd to institute proceedings in the Magistrates Court for non-payment.
The evidence at trial
Despite the pleaded case seeking an award of $52,662.00, counsel for the appellant opened on the basis that the appellant sought an award in the sum of approximately $43,000.00.
In evidence-in-chief the appellant said:
A… when this project started I took over charge of all these particular costs [operating costs] because it’s easier. I could manage it more efficiently, more effectively, so I did that, and then in the pilot project we added up our costs over the term of a year basically, so rather than submitting pieces of paper every month or whenever the interest goes in because it became administratively difficult which is tended, I tended to accumulate those costs and then render an invoice at the end of it. So I just kept the same process going for this particular project.
QSo the account for 28 October 11 relates to expenses over what period.
AJuly 2010 to June 30th 2011.
QThe previous financial year.
AYeah, the previous financial year.
QAnd when did the project with RST come to an end.
AThe end of December 2011.
QThe second account dated 30 January 2012 occurs after that six month period.
AThat’s correct.
QWhen you rendered those accounts what was your expectation.
AThey would be paid.
QWhy did you have that expectation.
ABecause that wasn’t listed in the budget document. We agreed those expenses were paid as operating expenses, so my expectation would be that they would be paid.
In the course of examination-in-chief the appellant produced a number of receipts for amounts spent on items considered by the appellant to be “operating costs” for which he was entitled to reimbursement pursuant to the terms and conditions of the contract he entered into with Regional Skills. He said:
Q… Can you explain to the court what those documents constitute, for the benefit of the court.
DISCUSSION ENSUES IN RELATION TO DOCUMENTS
AThat’s correct. They are my operating costs during that period of the project.
Q Are they the costs you seek in this claim.
AThat’s correct, part thereof.
The receipts (exhibit P3) taken with some additional receipts relating to payments made to Telstra (exhibit P4) totalled $48,776.00.
The appellant gave evidence identifying the goods or services subject of many of the invoices contained in exhibit P3 and how they related to the discharge of his role in the project.
In cross-examination the appellant was taken to the 28 October 2011 invoice. He agreed that the invoice was for the costs itemised in the invoice as incurred over a 12-month period from 1 July 2010 to 30 June 2011. He gave the following evidence:
QYou didn’t come up with that figure [the amount itemised for telephone and internet costs] by adding up any actual telephone costs did you.
ANo, that’s correct.
QThe same answer goes for the second item doesn’t it, travel and car costs, for the same period.
AThat’s correct.
QIt’s 1 unit and it’s a round figure of $5000, and that’s not because you added up mileage and petrol and tyre wear and insurance for your car.
AThat’s correct.
QThe same answer goes for office consumables.
AYes.
QThe $7300 isn’t you adding up all of the Australia Post receipts and so on.
AThat’s correct.
QAnd oncosts, that’s not actually recording for example all of your super contributions for the same period.
AThat’s correct.
QIn that sense this document does not record your actual expenses.
AMy - when I drew that document up I knew I was on or about par for all those costs so that’s what my basis was, and as I subsequently went through the records I found that that was fairly accurate; sometimes a little bit up, sometimes a little bit down, but in terms of understanding where I was it was fairly close to what I was going to claim anyway, so without having to go minute by minute, dollar by dollar -
QThese aren’t you[r] actual costs though.
ASorry?
QThese aren’t your actual costs.
AAren’t my actual costs.
QSo you sent an invoice to RST asking them to pay you $35,108 and that was not actually what you had incurred in costs for those items.
AThat’s correct.
Cross-examination then turned to how the appellant arrived at the figure set out in the 28 October 2011 invoice.
Q… if I can ask you to turn back to p.3 behind tab 8, just bearing in mind the number $19,908 which was the claim for telephone and Internet costs, in the second column, that’s the revised column of that budget, all you have done is take the whole line item, $19,908 -
AThat’s correct.
Q- and put it in this invoice.
AThat’s correct.
QIn other cases you haven’t taken the whole of an item, so you have explained with the car, I think your evidence was, or I understood it to be that you had taken the $10,000 allowance for the car and you divided it in two, because you regarded that as an equitable carve up of that line item. Is that a fair way of putting it.
AIt was just to remove that possibility of being … with the car that Caroline Reichstein had.
QSo you have left $5,000, from your point of view, in the budget for that leased car.
AYes.
QAnd you have taken the other $5,000 and put it in this invoice.
AThat’s correct.
QLikewise with office consumables, you have taken another $7200 straight from the budget -
AThat’s correct.
Q- and put it in the invoice.
AThat’s correct.
When counsel for Regional Skills turned to cross-examine on the last item contained in the 28 October 2011 invoice (on-costs), the transcript records that counsel for the appellant advised that the appellant did not press his claim in relation to that item. Nonetheless, the appellant conceded that the figure ($3000) itemised for on-costs was extrapolated from the budgeted sum.
Cross-examination turned to the 30 January 2012 invoice. The appellant conceded that the total amount sought in the 30 January 2012 invoice was determined simply by dividing the total amount sought in the 28 October 2011 invoice by two on account of the second invoice being for a period of six months where the 28 October 2011 invoice purported to represent operational costs incurred over 12 months. Cross-examination proceeded:
QAgain, the second invoice is not based on any bookkeeper type process of going through your shoebox receipts.
ANo.
QIt’s based on you looking at the budget and extrapolating figures and putting them in an invoice.
AYeah, that’s correct.
QIf these invoices had been paid you would have obtained payment for things you were claiming when you actually didn’t know for sure if those figures were right; in fact you knew they weren’t right.
AI knew they weren’t correct but in hindsight actually most of them were in excess of what I claimed.
QIn hindsight. So after you have issued these you then checked.
AYes, that’s correct.
QAt the time you issued them you were quite content to ask Regional Skills Training to pay you over $50,000 without actually knowing what your costs were.
ABecause in reality they were more than that.
QIn hindsight you have established that.
AYes, in hindsight, but because I knew where we were, I had a running figure in my head for the want of a better term. I knew that what I was claiming was legitimate, I knew I had the invoices to back them up. I knew that my costs were slightly in excess of what I was claiming so I only claimed for the top of the budge[t], I didn’t claim in excess of the budget.
Cross-examination clearly exposed a disconnect between the bundle of invoices tendered as part of the appellant’s case (exhibits P3 and P4) and the unpaid invoices subject of the claim.
In evidence-in-chief the appellant had produced the exhibits contained in exhibits P3 and P4. He suggested that when summed the amount spent as recorded in each invoice totalled the amount claimed in the two invoices submitted to the respondent, subject to some adjustments. The appellant explained that because his claim exceeded the budgeted amounts for operating costs he revised his claim downwards. He said:
A… when I added up all my operating costs across the various items it was slightly more than the claim, the amount that I claimed, but I actually wrote those off because I didn’t think it was important.
QYou’re saying even though we’re here looking at receipts for $ for envelopes from Australia Post, there are a few thousand dollars you have just decided not to pursue for really no reason.
ANo, it’s because I had to - I only claimed for the top of the amount of the budget so there were items in excess of that I didn’t claim against that had overspent on that budget, I only claimed up to the top of the budget, if that makes [sense].
QI’m not sure that it does, Mr Kidd. Had these been paid at the time you would have received $52,662.
AIf I -
QThat’s correct isn’t it.
AThat would be correct, yeah.
QYou can see them and add them up if you want.
AYep.
QIf you win this case, at best you will be $48,000 and maybe some interest in costs, but the payment for the invoices would be effectively $48,000.
AI understand that to be so.
QHad these been paid at the time you would have wrongly got $4,662.
ANo, I don’t believe it’s like that. It’s - as I said before, when I compiled my operating costs they were actually in excess of $52,000, so I wrote the number above that number off, I just disregarded those, or I proportioned down my claims and just submitted that which came up to the number it came up with.
HIS HONOUR
QCan you tell me that answer again.
ASorry, yep. As an example, if I incurred a $1000 - $1100 worth of costs on some operating cost, but in the budget I was only allowed $1000, so I only claimed against the $1000, and then afterwards we reapportioned the costs again to reflect, I guess - amended the claim down to 48, so - we reapplied the costs, wrote of[f] bits that we didn’t think were extraneous until we got that figure.
XXN
QMister Kidd, surely either you were entitled to amounts then and now, or you were never entitled to them then and you’re not entitled to them now.
AWhat are you asking?
OBJECTION: OBJECTION BY MR KERIN RE QUESTION OF LAW
…
MR BULLOCK: The question to the witness was surely if you are entitled to something then, you’re entitled to it now, and if you weren’t entitled to it then, you’re not entitled to it now. There is nothing that you used to be entitled to that you’re not entitled to now.
QUESTION ALLOWED.
AMy understanding of it was like this, we did this project, we each got a fee for doing it; there were a certain amount of operating costs. If there was excess for those operating costs at the end of the project then we would split the proceedings of those excess costs, or the costs that hadn’t been incurred. When I got that email regarding how they saw the budget I understood that they had transferred that into their general operating model so therefore there was an overspend on all the budget items or operating costs as they saw it, which they said they had incurred, but they actually hadn’t done any of the project, so then I put in a claim for those operating costs. I knew the operating costs were valid because in most items it was slightly more than as I understood them.
XXN
QI think I’m putting a fairly simple proposition to you, Mr Kidd, which is this. Your claim not is [sic] $48,000, and your claim in your invoices was $52,600, and a few dollars. There is nothing that you were entitled to then that you’re not entitled to now worth $4,600, is there.
AI wrote some items off.
QWhich items did you write off.
AI can’t remember now; I can go back through my books and have a look.
QIs that just generosity.
ANo, it’s to get myself to a certain figure.
QYou don’t actually have receipts. We’ve been through a lot of receipts already today. You don’t have receipts for anything like $52,600, do you.
AYes I do.
QI suggest you have got receipts for something in the order of $10 or $20,000, and the rest of this is your calculations and things like motor vehicle costs and oncosts and the like, which are not actually borne out by any receipts or other underlying documents.
AWell they were the operating costs of the project, you know. That’s where we came up with the numbers.

The appellant was cross-examined on numerous of the invoices contained in exhibit P3 against the background of the defence case being that the appellant was an independent contractor. Thus many of the expenses in relation to which he sought reimbursement were costs associated with his provision of a service for which he was paid a fee and thus expected to be absorbed as part of his fee. The appellant was cross-examined on other receipts to show that, even on his case, the full amount claimed could not be attributed to the course he delivered for Regional Skills. Further cross-examination sought to suggest that claims made for some costs were simply unreasonable, arguably fraudulent.
As mentioned, Regional Skills’ case was that the appellant was, in effect, an independent contractor. In that regard he was described as an expert deliverer contracted to teach in a course for which the respondent was responsible. It was not a case of there being a joint venture or a partnership. It was never the case that Regional Skills agreed that the appellant would be entitled to recover business overheads. It was never agreed that, should there be an underspend in the amount allocated to operating costs in the budget, that it would be divided 50/50 with the appellant. The appellant was entitled to a fee of $2,325 per student (in this case approximately 60 students enrolled).
Ms Caroline Graham, the manager of Regional Skills, gave evidence. She had the opportunity to review the receipts contained in exhibit P3. She was asked:
QHave you had the opportunity to go through those for yourself.
AI have briefly.
QPrior to this dispute, have you seen any of those documents.
ANo.
QBeyond reading what’s on the face of them, are you able to connect any of them to this project.
ANo.
QDid, at any stage before the invoice that accompanied the emails that we’ve just looked at, at any stage before that, had Mr Kidd ever asked you whether RST would pay for a mobile telephone for him.
ANo.
QWhat about a desktop computer.
ANo.
QWhat about a laptop.
ANo.
QWhat about copies of Microsoft Office.
ANo.
QWhat about any of the other items in the invoices and receipts.
ANo.
In cross-examination Ms Graham conceded that all reasonable expenses incurred over and above the appellant’s normal operating costs in running an office would be paid by the respondent. For such costs the appellant needed to send invoices to the respondent and he would then be reimbursed. That is to say Ms Graham agreed that it was a term of the contract engaging the appellant that the respondent would reimburse expenses that were reasonably incurred.
Ms Graham denied that there was ever any agreement that the underspend on any budget line would be divided 50/50 between the appellant and the respondent. All the appellant was entitled to was his fee per student and expenses reasonably incurred.
Ms Graham said that it was her understanding that the appellant had been paid for every reasonable expense that he had incurred in the course of the project. As a consequence, when the respondent received the two invoices subject of the claim it rejected them because the expenses sought were not reasonable. The following exchange occurred in cross-examination:
QIt’s the expenses where the issue remains, correct?
AMr Kidd’s expenses were paid.
QSorry, some of his expenses that are at issue.
AMr Kidd’s reasonable expenses were paid.
QHave you considered each and every one of those individually, when you say you looked at it to say whether they were reasonable or not.
AI find it very difficult to understand how months and months after a course is completed, Mr Kidd can put in a list of expenses after he has already submitted us an invoice for two specific amounts of money that he has decided he is owed and it was only when we requested that he justify that he came back with them allocated against expenses.
QBut the first time you heard about the expenses was in October or September 2011. The project was still going, wasn’t it and then you determined not to have anything more to do with him.
AMr Kidd put in a random invoice. He didn’t have it allocated against any expenses.
QAnd you just simply told him that you didn’t agree with him.
AThat’s correct.
QHe did send you a long email explaining it, didn’t he.
AYes he did.
QOn 29 November.
AYes he did.
Ms Graham then said that she considered the invoices invalid claims for funds. She was then asked about her review of the invoices constituting exhibit P3. Having undertaken that review she thought her attitude regarding the claims was justified. She said:
AI’ve got no problems with reasonable costs, as I’ve said before. All Mr Kidd had to do was to put in his costs as they were incurred and we would look at them. If anything was reasonable, we would pay that.
QBut it wasn’t a term [that] he had to do it as incurred. I mean, he did it within the time of the contract or shortly thereafter, didn’t he.
ANot reasonable costs.
Later in her evidence Ms Graham was taken back to the question of what was and what was not a reasonable cost. With respect to the appellant she said:
QAnd why do you say they’re not reasonable, any specific reason.
ABecause we had paid all the costs that Mr Kidd had submitted throughout the course of the project with no problems at all. Wherever we had a query about an invoice, we queried it as soon as it came in and then we had paid accordingly. Mr Kidd hadn’t had any problems getting us to pay him for his students or those reasonable costs. When I receive an arbitrary claim for money that Mr Kidd believes he is owed and refused to pay it, and then Mr Kidd then tries to justify it with a whole bunch of invoices, I consider that unreasonable.
QAnd that’s the basis of your thinking. It’s not that you’ve gone through each and every account and said -
A- I certainly have gone through them and had a look at them and a high percentage of them are costs that Mr Kidd has incurred as a result of running an office. As a consultant, you would expect that he would run his own office and then some of them are completely incorrect ie a laptop.
QDo you agree that he worked at least 90% of the time on the project and its delivery, between July 2010 and December 2011.
AMr Kidd’s never told me what percentage of his time he believes he worked on the project, but if it was 90% of the time, I would suggest that he was a very inefficient worker.
QPostage costs, in particular, postage of various things to students. You don’t believe they’re a reasonable costs incurred in that, if they were related to the project.
ACaroline Reichstein had an account at Clare Post Office and certainly would be able to use that for all of the postage costs, with no problems.
QBut if Caroline paid for them, you would reimburse her, wouldn’t you.
AOf course we would, but at the same time she also had an account at the local post office.
QBut if Mr Kidd spent money of his own on postage to students, why wouldn’t that be a reasonable expense.
AIf Mr Kidd spent money of his own on postage to students, I would suggest that Mr Kidd would have come back and requested that as a reimbursement at the time he spent it.
QAs opposed [to] when he did do it.
AAs opposed to when he collected a whole heap of invoices to justify a $50,000 claim.
QAnd again, telephone costs associated with the online delivery of the course, is that not reasonable.
ATelephone costs associated with an online delivery of a course is reasonable and it would be the fact that we paid those costs to Caroline Reichstein. She had an office where she was due to work. If Mr Kidd chose to work out of his office, that was his problem.
QSo the answer to the question is, do you agree that costs incurred by Mr Kidd, if he did in fact pay telephone costs himself related to work on the course; are they reasonable.
AMy answer is, is that Mr Kidd was given the resources at Caroline Reichstein’s office. The fact that he chose to work from his office, is his choice.
In further cross-examination Ms Graham repeated that she believed she had paid the appellant’s reasonable expenses. Her evidence suggested there were no costs outstanding that she was prepared to accept as reasonable costs incurred by the appellant in the course of his involvement in the project. In that regard she indicated that she would not change her mind absent some evidence to show when the costs were incurred, how they related to the delivery of the course and that they were not office consumables. That, she said, had not been done. All that had occurred was the production of the invoices comprising exhibit P3 after an arbitrary claim had been made. Cross-examination concluded:
QI put it to you they [the invoices subject of exhibit P3] are reasonable and they were incurred in the course of delivering the course. What do you say to that.
AI disagree.
QI put it to you there was in fact, in effect, a joint arrangement between the pair of you; whether it was a joint venture or otherwise, to deliver the course and if any of the funding lines were left with a balance in the positive, you would distribute them.
AI disagree.
The Magistrate’s reasons
In his reasons, after a brief introduction, the Magistrate summarised the evidence adduced by the appellant and respondent at trial. The Magistrate then turned to analyse the evidence. First the Magistrate made observations as to the credibility and reliability of the witnesses. He concluded that “where there is a conflict between the evidence of the plaintiff witnesses and that of the defendant witnesses I prefer the evidence of the defendant witnesses”. The Magistrate accepted that the idea for the development and presentation of an agronomy course originated with the appellant but found that for that idea to become a reality the appellant needed the assistance of a registered training organisation such as Regional Skills. Next the Magistrate found that the assertion that the project was advanced as a joint venture was not borne out on the evidence. The Magistrate then focused upon the evidence relating to the asserted agreement regarding the payment of the appellant’s expenses. He recorded:
16.… The plaintiff’s evidence was there was an agreement that if any of the expenditure items referred to in the budget were not fully expended, the allocation would be shared equally between the parties. Ms Graham and Mr Cook said the plaintiff did put this proposal to the defendant and they denied the defendant agreed such a request. The plaintiff’s statement of claim alleges the parties entered into a contract on 18 May 2010 and the agreement between the parties was a combination of notes of the meeting and a budget document. It is alleged these documents detailed roles, activities and expenses outlined in the budget document. It is pleaded the budget document and the meeting notes allocated expenses in writing and included operating expenses such as travel and accommodation, motor vehicle, office consumables, computers, telephone, internet and on costs. The pleadings allege the defendant breached the contract because it failed to pay invoices issued by the plaintiff on 28 October 2011 and on 30 January 2012. The pleadings do not mention a partnership or joint venture.
17.The defendant denies the budget and the meeting notes constituted a contract or were ever intended to be such. Rather the document was merely an estimate of expected income and expenditure. It was not a binding agreement but rather a projection of the anticipated revenue and costs and to claim the document was a contract gives the documents a status which was never intended. The defendant further denied the meeting notes were anything more than informal minutes of a business meeting. The defendant said the meeting notes contained no more than a single reference to travel and accommodation costs for Mr Kidd, Ms Reichstein, and Mr Cook. The amount budgeted for this was $30,000 only and all other items in the budget referred to the defendant’s costs, not those of the plaintiff. Nowhere in the document is there anything to support an agreement to share costs.
18.The defendant’s case is the budget and the meeting notes are the defendant’s documents and were presented by the defendant to the plaintiff merely to inform the plaintiff of the outcome of negotiations between RST and Agrifoods. The evidence of the defendant’s witnesses was the plaintiff contributed only minimally to the discussions leading to the provision of funding and necessary approvals. Rather, on the defendant’s case, the plaintiff was engaged by the defendant to design, develop and deliver the training course for the defendant. In return the plaintiff would be paid at a rate of $2325 per student. The project would run for 18 months and terminate on 31 December 2011 and the defendant would pay accommodation and travel costs and certain IT costs as approved by the defendant. What the budget shows is that if 80 students enrolled in the course, the defendant would be paid an amount of $186,000 for presenting the course over a period of 18 months. On the plaintiff’s case this would all be profit and any expenses incurred by the plaintiff in running his own business were to be reimbursed.
[footnote omitted]
The Magistrate then referred to the respondent’s submission that the conduct of the parties had been inconsistent with the existence of the asserted contract in that the appellant had submitted invoices for flights, accommodation and car hire which Regional Skills had paid in addition to paying each of the three invoices submitted for the delivery of the course. Unlike these earlier invoices, the October 2011 and January 2012 invoices subject of the proceedings were immediately rejected.
As to exhibit P3 the Magistrate observed:
20.The individual invoices tendered by the plaintiff (Exhibit P1) [sic] in verification of the two invoices are a curious collection of invoices and receipts. Included are invoices for recovery of the plaintiff’s electricity costs, telephone and computer expenses and replacement of office furniture, council rates on his house, post office box rental, RAA membership fees and membership of a society which the plaintiff had been involved with for years. The claims included invoices for batteries for $4, a pen at a cost of $6.95 and in one case an invoice for groceries. The plaintiff claimed reimbursement for a computer he purchased on Christmas Eve in 2011, that is six days before the project was due to end. He claimed half the costs of a new desktop computer and reimbursement of the purchase price for a new copy of Microsoft Office purchased three months after the end of the project. Other claims for reimbursement related to Microsoft Office licences purchased in January 2013, a computer mouse purchased in December 2011 and another mouse purchased in January 2012. The plaintiff purchased a diary for the 2012 calendar year and his evidence about this was he had paid for a diary in 2010 and so it was only fair to claim from the defendant the cost of the new diary in 2012. Among the claims were the cost of a new digital camera, a new office chair and a new mobile phone. The evidence was these were all used in the presentation of the course but none of these items were released to the defendant on completion of the course.
21.The amount originally claimed by the plaintiff was $52,662 but confusingly at different times in his evidence the plaintiff said the quantum of his claim was $48,000 and according to his counsel the amount claimed was $43,000. At p.150 of the transcript the plaintiff was asked to state the exact amount he sought on his claim to which he answered:
A.Well, we had negotiations and we go round different sums of money. I write off items from time to time. It’s advice.
22. A few moments later he said:
A.I can’t precisely articulate it but I know that there was a sum of money that I was owed as part of the project, and more than all of these statements that you have just mentioned.
Q. So your claim is for more than that.
A. My costs were more than that, yes.
[footnote omitted]
The Magistrate then recounted the respondent’s submission in relation to the invoices produced.
23.The defendant says the plaintiff’s closing submissions do not reflect his case as pleaded or his evidence at trial. The plaintiff’s statement of claim pleads the defendant agreed to reimburse the plaintiff’s operating expenses including on-costs, although the claim for on-costs was abandoned during the trial. The plaintiff’s evidence was he was entitled to recover his own office expenses and a share of the project expenses. What the plaintiff submitted in closing was he was entitled to recover reasonable expenses incurred in providing services. That is now portrayed as an agreement to reimburse all expenses in any way related to the running of the plaintiff’s home office rather than a claim for payment of operating expenses as originally invoiced. The defendant agreed to pay ‘reasonable expenses incurred in the provision of services’. The defendant concedes reasonable expenses would include stationary, postage and all reasonable expenses and costs of running an office. On three occasions the plaintiff submitted invoices for reimbursement of such costs those invoices were paid. Unlike those expenses, the invoices which are the subject of this claim were not submitted to the defendant as and when they arose.
[footnote omitted]
I interpolate, it is paragraph 23 of the Magistrate’s reasons that the appellant latches onto in this appeal. As mentioned, he contends that the concession having been made and accepted, it was for the Magistrate to determine which of the invoices tendered constituted reasonable expenses.
Returning to the Magistrate’s reasons, the next topic addressed was the claim by the appellant that the respondent had deliberately manipulated expenses recorded. The Magistrate rejected this contention. He concluded that the appellant had issued the October and January invoices “because he believed he was entitled to a larger share of the imagined profits”. The Magistrate then said:
26.The plaintiff has had two attempts at presenting his expenses. The first was the collection of invoices in the plaintiff’s tender book and the second is the Schedule of Accounts contained in the final written submissions. Originally 104 invoices were included in the tender book but the Schedule of Accounts is a reworked and filtered version of those invoices. The Schedule of Accounts attempts to recast the claim following which the plaintiff asks the court to consider each item and decide which of the accounts are reasonable costs incurred in the course of delivery of the services. The plaintiff’s closing submissions are not consistent with the pleadings or the case presented at trial. Rather the plaintiff had sifted through the invoices in the tender book and presented a sanitised list for consideration. In essence the plaintiff has bundled together the least controversial items of expenditure and asked the court to sort out the reasonable from the unreasonable. This is not the role of the court.
Thereafter the Magistrate listed his specific findings made on the balance of probabilities being:
27. I make the following findings on the balance of probability:
1.I find the plaintiff approached the defendant with a proposal to create and deliver an educational course in agronomy nationally.
2.I find the plaintiff was unable to present the course on its own and required the involvement of a registered training organisation.
3.I find the defendant is a registered training organisation.
4.I find the defendant agreed to the proposal and looked to the plaintiff to attend to the presentation of the course.
5.I find the defendant obtained approvals and funding from Agrifood Skills Australia Pty Ltd and the defendant entered into a facilitation agreement with Agrifood Skills Australia Pty Ltd for provision of training services.
6.I find the defendant prepared a draft budget which was presented to the plaintiff on 18 May 2010 which budget was eventually reluctantly accepted by the plaintiff.
7.I find the agreement between the plaintiff and the defendant was not in the nature of a partnership or joint venture.
8.I find the budget and meeting notes do not constitute a contract between the plaintiff and the defendant.
9.I find the plaintiff presented its program and rendered invoices to the defendant which invoices were paid.
10.I find the plaintiff rendered invoices to the defendant in October 2011 and January 2012 which were rejected by the defendant.
11.I find the claim for expenses contained in the plaintiff’s tender book and later refined into a Schedule of Accounts are not legitimate operating expenses as contemplated by the parties at the beginning of their relationship.
12.I find the defendant’s refusal to pay the invoices of October 2011 and January 2012 did not constitute a breach of contract.

In consequence of these findings the Magistrate dismissed the claim.
The appeal
The appellant pursues only one ground of appeal being:
In light of the finding that “the defendant agreed to ‘pay reasonable expenses incurred in the provision of services’” which “the defendant concedes would include stationary, postage and all reasonable expenses in costs of running an office” (Judgment, [23]), and to the extent that such a finding was not expressly made the learned Magistrate was in error, the finding that it was not the courts [sic] role to determine which expenses were subject to reimbursement and reasonably incurred was incorrect and the court should have so determined.
As mentioned, the appellant latched onto paragraph 23 of the Magistrate’s reasons. The first criticism made by the appellant was that, whilst the Magistrate recorded the respondent’s concession, he did not proceed to find that the agreement between the parties was that the respondent would pay for the appellant’s reasonable expenses. The appellant contended that the Magistrate erred in not making such a finding and that this Court should proceed to do so. The argument then proceeded that if such a finding were appropriate and one that should have been made, then the learned Magistrate erred in failing to determine whether the various invoices tendered were reasonable expenses. In this regard it was submitted that the learned Magistrate erred in stating that such task was “not the role of the court”. Counsel submitted that even though the task was not without some difficulty, that did not mean it was one that the court could refuse to undertake. This was not a case where there was a failure to produce sufficient evidence to establish the claim.
In elaborating upon these arguments counsel for the appellant acknowledged that the appellant had recast his claim during the course of the trial, narrowing it to reasonable expenses incurred during the provision of the services for which he was contracted. It was also acknowledged that the claim was further refined to seek only those expenses contained in the Schedule of Accounts provided by the appellant’s counsel at trial in the course of closing submissions.
Counsel referred to the Magistrate’s comment that the appellant’s closing submissions were not consistent with the pleadings or the case presented at trial. He did not dispute this, but contended that pleadings were a means to an end and not an end in themselves, and that once it became apparent that the appellant was entitled to reasonable expenses, it was necessary for the Magistrate to separate the reasonable from the unreasonable.
The respondent contended that it was not open to the appellant to elevate the Magistrate’s reference to the evidence at paragraph 23 of his reasons to a contractual right. To do so overlooked the respondent’s case that the appellant was an independent contractor who, from time to time, used his home office to perform work related to the contract. It also overlooked the fact that the appellant’s home office was already maintained by him prior to the contract and was not used exclusively for work on the contract.
Further the amounts claimed by the appellant predominantly related to the ordinary overheads of running a business, including the maintenance of a home office. It followed that the expenses incurred were not the sort of expenses that in a relationship governed by a contract for service, would ordinarily be passed on to the party for whom the service was provided save in the calculation of the overall fee charged and payable.
Further again, counsel for the respondent submitted that the concession made at trial was more refined than what the Magistrate recorded. The concession was to be found in Ms Graham’s evidence and was to the effect that the appellant and the respondent agreed “that all reasonable expenses that were incurred, over and above his normal operating costs in running an office, would be paid by RST and that he needed to send those expenses into us and we would reimburse them, which we did”. In addition, there was the requirement that prior approval had to be obtained for any expenditure over $1000.
Counsel for the respondent submitted that it was clear from the Magistrate’s reasons and from his ultimate findings that he did not form the view that there was any contractual term between the parties that meant the appellant was entitled to be reimbursed for the normal operating costs of his business or his office per se. In this regard, it was to be recalled that the Magistrate preferred the evidence of the respondent’s witnesses over that of the appellant’s and that the respondent had said there was never an agreement that the appellant would be reimbursed for the cost of conducting his own home office.
The respondent contended that the Magistrate correctly found that the invoices, which were the pleaded basis for the appellant’s claim, were issued because the appellant believed he was entitled to a larger share of the imagined profits of the project. The Magistrate considered that it was disingenuous for the appellant to seek to justify the invoices at trial by reference to his alleged actual expenses. Those findings were not challenged on appeal. However, the appellant invited the Court to rule in his favour on the basis of an unpleaded case, contrary to his pleaded case, and in the face of findings that he deliberately issued invoices for non-existent costs. Having failed on his original pleaded case, counsel for the respondent submitted that the appellant could not run a different and inconsistent case on appeal.
Counsel continued, even on the appellant’s unpleaded and inconsistent case, there was no evidence at trial sufficient to make out any claim by the appellant for any office expenses. The respondent went so far as to say that the expenses that were currently the subject of the claim were plainly illegitimate. The Magistrate identified a number of examples in his reasons (at paragraph 20) and there were more examples given at trial. Further, to accept the appellant’s claim would be to accept the appellant as a reliable witness contrary to what the Magistrate found. Not only was there no contract for the respondent to meet the appellant’s office expenses, but the evidence at trial showed that the appellant’s claim was nothing more than a contrivance designed to force the respondent to pay the appellant’s own private or business expenditure rather than costs genuinely arising from the delivery of the project. Again the appellant’s case in relation to those matters was never properly pleaded. In most instances, the first time the respondent became aware of the nature of the expenses claimed was during the trial.
As to the Magistrate’s statement that it was not the court’s role to determine which expenses were reasonably incurred, the respondent submitted that the appellant misstated the finding. The conclusion was to be understood in the light of the appellant’s case and the way in which it unfolded. The appellant first pleaded a case based on two invoices, then altered his case to one of an entitlement derived from the fact that he was a partner or joint venturer, then changed it again to a claim seeking payment of expenses supported by what the Magistrate described as a “curious collection of invoices and receipts” and inconsistent with a Schedule of Accounts provided by counsel. At no stage did the appellant satisfactorily explain the quantum of his claim. It is in that context that the Magistrate’s statement that the role of the court was not to determine the reasonableness of the appellant’s expenses was made. It was not an abdication of the court’s fact-finding role, but a refusal by the court to sift through a large quantity of unexplained documents without the assistance of evidence or submissions from counsel.
The respondent contended that the Magistrate’s remarks were better understood as referring to the appellant as having failed to prove his case to the required standard.
Consideration
In Gould v Mount Oxide Mines Ltd Isaacs and Rich JJ said:[1]
… pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest.
[1] (1916) 22 CLR 490 at 517.
And in Banque Commerciale SA (In liq) v Akhil Holdings Ltd Dawson J said:[2]
But modern pleadings have never imposed so rigid a framework that if evidence which raises fresh issues is admitted without objection at trial, the case is to be decided upon a basis which does not embrace the real controversy between the parties … cases are determined on the evidence, not the pleadings.
[2] (1990) 169 CLR 279 at 296-297; see also Vale v Sutherland (2009) 237 CLR 638 at [41] (Gummow, Hayne, Heydon, Crennan and Kiefel JJ).
Thus pleadings may be abandoned in part, perhaps in whole, where the parties agree to such course implicitly or expressly. That, however, is not this case. Here the appellant’s case at trial evolved and continued doing so right up to counsel presenting the Magistrate with a schedule in the course of his address said to identify the invoices subject of the claim. There was no agreement that the issue in dispute was whether a subset of the invoices comprising exhibits P3 and P4 listed in the schedule provided by counsel were reasonable expenses, to be resolved against the background of it being agreed that there was a contract for the payment of reasonable expenses.
In Banque Commerciale SA (In liq) v Akhil Holdings Ltd Mason CJ and Gaudron J said:[3]
The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In liq.), per Isaacs and Rich JJ. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness.
[footnote omitted]
[3] (1990) 169 CLR 279 at 286.
Absent agreement between the parties (whether implicit or express) or a successful application to amend the statement of claim, procedural fairness will ordinarily demand that the court of trial confine itself to the relief available on the pleadings. In the present case the pleaded case was that the appellant was entitled to an award of damages in an amount equal to the sum of the amounts featured in the October 2011 and January 2012 invoices. Any suggestion that the contract sued upon was located in the minutes of the meeting of 18 May 2010 and the budget discussed at that meeting was implicitly abandoned. No case was ever articulated by the appellant as to when it was agreed that he was entitled to his reasonable expenses nor what was encapsulated in the concept of “reasonable expenses”.
True it is that the appellant was cross-examined challenging his entitlement to some of the expenses featured in exhibit P3, but such cross-examination was undertaken for the purpose of discrediting the appellant’s claim as pleaded, not as part of a dispute as to what was a reasonable expense within the meaning of the bargain agreed and whether the individual invoices were reasonable expenses as agreed.
It was not until the cross-examination of Ms Graham that the appellant’s case became one of an entitlement to reasonable expenses and that the invoices as tendered, or at least those featured in counsel’s schedule, were reasonable expenses. But Ms Graham’s concession was made on the basis of the appellant being an expert deliverer, in effect, an independent contractor entitled to his fee for service and reasonable expenses. In his evidence the appellant contended that he was something more than an independent contractor and his entitlements were something greater than those conceded by Ms Graham.
Having read the evidence, the appellant was not a good witness. My impression is that counsel has attempted to salvage something from a sinking ship. Be that as it may, I do not think this was a case where the Magistrate was free to abandon the pleadings and the relief sought in those pleadings. The parties did not agree to such course. To my mind this conclusion can be tested by considering how one would go about the task that the appellant contends this Court should undertake on appeal. The first question is what amounts to a reasonable expense within the meaning of the contract? Beyond the implicit assertion by the appellant that all of the invoices comprised in exhibits P3 and P4 were reasonable expenses, his case has no greater content. Somewhat unusually his case is undermined by his counsel’s schedule, which I understand to have excluded some of the invoices upon which the appellant in evidence relied. If one were to entertain this case, is it on the understanding that the appellant was an independent contractor as the respondent asserted? To my mind resolution of that question is unavoidable because of the ramifications it has for what may fall within the ambit of reasonable expenses. How should this Court determine that question?
My point is that there is a large element of the artificial about the appeal in that what was contended seems to be advanced on the basis that the appellant’s evidence be ignored, save that the invoices constituting exhibits P3 and P4 represent expenditure he incurred for the goods or services to which each relates and in relation to which he now says he should be reimbursed, subject to any such invoice appearing in counsel’s schedule. Beyond that, the Court is invited to put to one side his evidence about his entitlements and to determine, not whether each invoice tendered is for a reasonable expense within the meaning of Ms Graham’s concession, but whether only those invoices within exhibits P3 and P4 and featured in counsel’s schedule constitute reasonable expenses within the meaning of Ms Graham’s concession, Ms Graham having given evidence that none are.
In my view to undertake the task that the appellant would have the Court undertake is to resolve an unarticulated case without the benefit of evidence and submissions.
Further, I agree with counsel for the respondent that to so proceed is to ignore the credit findings made by the Magistrate. It could be said that those findings relate to a different case, in effect. That is, the findings are made in relation to the contention that the appellant was entitled to the amounts claimed in the October 2011 and January 2012 invoices, or to 50 per cent of the balance of any unexpended portion of budgeted expenses, or to the amounts claimed on the basis of the extrapolations revealed in cross-examination. Such contention highlights the difficulty in acceding to the argument advanced on appeal by counsel for the appellant; it ignores the case run and defended.
For these reasons in my view the Magistrate was correct to proceed as he did. I do not consider his statement that determination of whether the invoices referred to in counsel’s schedule were reasonable expenses formed no part of the court’s task was a statement made regarding the application of the standard of proof. I consider it a statement about the forensic contest and that it would be wrong to permit the appellant to abandon entirely his pleaded case. I would dismiss the appeal.