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.