Huebner v Manage Your Super

The Local Court proceedings

1. The next relevant event was the filing of the Statement of Claim in the Local Court at Orange on 17 June 2020. The amount claimed, prior to interest, filing fees, and service fees, was the sum of $4,404.60. There are two parts to that calculation. The first part was a claim for the refund of amounts paid by the superannuation fund to the auditor in connection with the 2018 and 2019 audits. It appears that the basic fee for an audit charged by the defendant was $380 plus GST, which amounts to $418. That was the amount charged for the 2019 audit. The amount charged for the 2018 audit was the same amount, plus $150, plus GST, for filing the ACR. $418 plus $165 amounts to $583. The amounts paid to the auditor for the 2018 and 2019 audits amounted to $1,001. The balance of the claim was to reimburse the plaintiff and his wife and daughter for the two meetings of directors held in Sylvania. The claim is itemised in par [4.4] of Mr Huebner's affidavit, affirmed on 25 August 2021. The total amount claimed was for $3,403.60. There are claims for meals, accommodation, and travelling, for both the plaintiff and his wife to attend each meeting at their daughter's residence in Sylvania on the two occasions. There is no proof that any of the monies were actually incurred. What is claimed are "reasonable amounts" as allowed by the ATO.
2. One must exercise the usual caution that the courts often exercise. Here was a man and his wife visiting their daughter. The man and his wife live near Orange. The daughter lived in southern Sydney. Travelling to and from Sydney on two occasions no doubt took time, as well as running up kilometres. I should point out that last Sunday, I motored from the Sutherland Shire to Orange to attend these sittings, and tomorrow after conclusion of the sittings, I shall motor back from Orange to the Sutherland Shire. There is no evidence that any of the costs claimed were actually incurred. One can understand that there may have been a need to travel to Sylvania, but whether they stayed with their daughter or in commercial accommodation is completely unknown, and whether they were fed by their daughter or had to pay for meals commercially is again unknown. The problem with the amounts claimed for travel is that not only have they not been vouched for in any way, but a meeting could have been held electronically, that is, by telephone, video link, and there are a number of commercial products available to those who have computers to meet up with other people. Meetings may be held by circulating minutes, which can be signed by each of the directors.
3. I return to the course of the litigation. As I have already mentioned, the Statement of Claim was filed on 17 June 2020. A Defence was filed on 30 July 2020. The Defence appears to be signed by Mr Parihar's company itself rather than by a solicitor acting on the company's behalf.
4. On 1 July 2020, a report was made by Ms Belinda Aisbett of Super Sphere Pty Ltd of 10 Yarra Street, South Yarra, in the State of Victoria. Ms Aisbett was qualified to provide an opinion by Mr Parihar himself, as is evident from his letter to her of 22 June 2021, a copy which can be found at page 70 of Exhibit 1. Ms Aisbett's report was put before the Local Court as being an expert's report. Commencing at the foot of p 2 of her report, she sets out her qualifications. Commencing the top of p 3 of the reports, they are these: "1.5. I hold a Bachelor of Business degree obtained from the University of Victoria in 1995; 1.6. I am a member of the Chartered Accountants Australia & New Zealand, obtaining the designation CA in 1998; 1.7. I have been an ASIC approved SMSF auditor since 2013, when the requirement to be ASIC registered was introduced; 1.8. I am a Fellow member of the Self Managed Superannuation Fund Association ('SMSFA'), in addition to being a specialist SMSF auditor with the SMSFA; 1.9. I have nearly 28 years' experience in auditing self managed superannuation funds ('SMSF'), and established Super Sphere Pty. Ltd. in July, 2003 to specialise in SMSF auditing; 1.10. I am a member of the SMSFA conference and education committees, and I co-chair the SMSFA monthly specialist auditor discussion group meetings; 1.11. I am a representative of the SMSFA to the ATO SMSF auditor professional association stakeholder group; 1.12. I am a member of the ATO Superannuation Industry Relationship Network committee; and 1.13. I present regularly around Australia on SMSF audit related topics."
5. On 25 August 2021 the plaintiff affirmed his affidavit, which was put before the Local Court. It appears to have been filed on 27 August 2021. There was also a statement made by Mr Parihar on behalf of the defendant. That bears the date, 26 August 2021, and was also put before the Local Court. On 2 September 2021, the defendant provided to the Local Court written submissions.
6. As I already mentioned, the hearing was conducted in the Small Claims Division of the Local Court at Orange on 3 September 2021. There is a transcript of proceedings on that day. The transcript comprises 19 pages, and can be found in Exhibit A on pages numbered 65 to 84 of that exhibit. Hereafter, I shall refer to the pages of the transcript. 3 September 2021 was a Friday. That records the commencement of proceedings at 10.14am. Mr Foley appeared via audio-visual link. Mr Foley is a member of the Bar, and he was instructed by Messrs Moray and Agnew, a well known firm practicing, inter alia, in Sydney. Mr Huebner was not present at court. His Honour then recorded this: "Registrar Lee who is a registrar at Orange, who case manages civil matters, spoke to me on Monday, or it might have been Tuesday ... it was her impression that Mr Huebner would be here in the flesh raring to go." His Honour then turned to look for any further communications. On page 2 of the transcript, after recording interaction between his Honour and the court officer and Mr Foley, His Honour noted, commencing at line 35, that he found a note saying that Mr Huebner wished to participate in the hearing by telephone. On page 3 of the transcript, it is recorded the plaintiff appeared over loudspeaker telephone at 10.22am. However, there was difficulty in Mr Huebner being heard, and Mr Huebner hearing what his Honour was saying.
7. Eventually, it was recorded that Mr Huebner wished to physically attend court, and he told his Honour that he could be there within either an hour or an hour and a half, although his Honour thought it would take only some 40 minutes for him to arrive at the Court House, because where he lived was some 40 kilometres out of Orange. Before the telephone connection was cut, his Honour said this: "What I intend doing is to have a barrister on the other side appearing from Sydney by audio visual link. I am going to read the evidence by way of statements." Mr Huebner then is recorded as saying: "Yes". His Honour then continued: "And then I am going to read the written submissions, and then I am going to invite any further submissions that the parties may wish to make, but only in short form, because you have already put in written submissions, all right? That's what I'm about to do." That brought an affirmative reply from the plaintiff. Arrangements were then made for the plaintiff to come physically to court. The telephone link to the plaintiff stopped at 10.26am. The audio-visual link concluded at 10.27am.
8. The audio-visual link, by which means Mr Foley was appearing, recommenced at 11.57am. By that stage, the plaintiff was present in the Court House. His Honour is then recorded as saying this: "Take a seat, Mr Huebner. Gentlemen, I have read the statement of claim. I have read the defence. I have read the replies to the defence. I have read the statement and the affidavit evidence. I have read the expert report. I have read the plaintiff's submissions. I have read the defendant's submissions, and including the tendered material. Is there anything else I need to look at Mr Huebner? You need to stand up, Mr Huebner, it might be Small Claims, but it's still a court." A little later, his Honour reiterated this: "I've read the submissions. Now, is there anything you want to say about the defendant's submissions that you have not anticipated in your written submissions, noting that it would appear that your written submissions have anticipated a lot of material, or a lot of matters as I read them? Unless I'm missing something. Yes, Mr Huebner?" That statement of his Honour ends on page 8 of the transcript at line 22.
9. His Honour then heard oral submissions, and there was a Socratic exchange between his Honour and Mr Huebner. That exchange continued over a number of pages. At the foot of page 11, His Honour is recorded as telling this to Mr Huebner: "All I'm asking you, and I'm giving you the opportunity to address any matters that you had not addressed in your case ... including your written submissions." What I have omitted, by the use of suspension points, is an interjection by the plaintiff of "Okay". The interaction between the plaintiff and his Honour continued to the foot of page 14 of the transcript. Then commenced interaction between Mr Foley on behalf of the defendant, and his Honour. That commences at the top of page 15, and commencing on page 16 at line 11 his Honour commenced to give his decision.
10. The decision occupies the remaining 39 lines of page 16, the whole of pages 17 and 18 of the transcript, and the top of page 19 of the transcript. His Honour recorded his decision, entering a verdict for the defendant. I shall return to the learned Magistrate's reasons.

The Magistrate's powers

1. The Local Court Act 2007 provides in s 29, the jurisdictional limit of that Court. The jurisdictional limit of the General Division of the Local Court in civil cases is $100,000. The jurisdictional limit of the Local Court in civil cases when sitting in its Small Claims Division is now $20,000. There is a further jurisdictional limit, when the Court is sitting in its General Division in respect of claims for damages for personal injury or death, but that is not relevant.
2. Section 29A provides a definition of "money claim". It is this: "In this Part, money claim means a claim for recovery of any debt, demand or damages (whether liquidated or unliquidated)."
3. Section 30 of the Local Court Act 2007 confers civil jurisdiction on the Court. Section 30(2) is in these terms: "Subject to this Part, the Court sitting in its Small Claims Division has jurisdiction to hear and determine - (a) proceedings on any money claim, so long as the amount claimed, whether on a balance of account or after an admitted set-off or otherwise, does not exceed the jurisdictional limit of the Court when sitting in that Division, and (b) proceedings to recover detained goods, or to recover the assessed value of detained goods, so long as the value of the goods, together with the amount of any consequential damages claimed for their detention, does not exceed the jurisdictional limit of the Court when sitting in that Division, and (c) proceedings involving company title home unit disputes under section 34A." Only s 30(2)(a) is currently relevant. The proceedings were in respect of a money claim, a claim for $4,404.60. The Local Court Act does not distinguish between areas of law, but clearly a money claim can arise out of contract, and can arise out of tort, and can arise out of the law of unjust enrichment, formerly known as quasi contract. Here the cause of action identified by the magistrate, and adopted by the plaintiff, was a claim for breach of contract. If a contract is breached and damage flows there from, the person whose contract has been breached is entitled to be put back in to the position they would have been had the breach not occurred. That is, using the classical formulation, restitutio in integrum.

Power on appeal

1. The nature of the appeal to this Court is limited. The relevant right of appeal is given in s 39(2) of the Local Court Act 2007. That subsection is in these terms: "A party to proceedings before the Court sitting in its Small Claims Division who is dissatisfied with a judgment or order of the Court may appeal to the District Court, but only on the ground of lack of jurisdiction or denial of procedural fairness."
2. The current appeal is accordingly limited to a ground of lack of jurisdiction or a ground of denial of procedural fairness. The plaintiff, very properly, does not take the position that there has been a lack of jurisdiction. Should he have taken that position, his case in the Small Claims Division of the Local Court would have been incompetent. Accordingly, the plaintiff in this Court relies upon a "denial of procedural fairness".
3. There are many types of appeals which can occur between a court at one level of the judicial hierarchy, and a higher court in that hierarchy. One is often required to differentiate between errors of fact and errors of law and other errors. In Britt v Parcell [2021] NSWDC 464, I reviewed the statutory background concerning appeals from the Local Court to this Court. At [3], I went on to say this: "... it must be seen that the Local Court Act itself distinguishes between errors of law, errors that involve questions of mixed law and fact, and appeals which require the leave of the Supreme Court but such leave only arises in cases heard in the General Division. One must therefore distinguish errors of law, errors of fact, and errors of mixed fact and law. However, the right of appeal from the Small Claims Division to this Court does not involve errors of law or errors of fact or errors of mixed fact and law but only orders made with a 'lack of jurisdiction' or a 'denial of procedural fairness'."
4. In Darlco Transport Pty Ltd v Knight [2014] NSWDC 137, I dealt with an appeal from a decision of Mr Olischlager (as his Honour then was). Commencing at [16]-[17], I said this: "16 The appellant has only a limited right of appeal. Section 39(2) of the Local Court Act 2007 is in the following terms: 'A party to proceedings before the Court sitting in its Small Claims Division who is dissatisfied with a judgment or order of the Court may appeal to the District Court, but only on the ground of a lack of jurisdiction or denial of procedural fairness.'" For the appellant to succeed, it must establish that there was a "denial of procedural fairness". There is no submission made that the Small Claims Division of the Local Court had no jurisdiction to hear and determine a claim for the princely sum of $9,801, based upon the common law tort of negligence. The Local Court Act 1982, s 73, referred to a denial of "natural justice" as the basis for an appeal from the Small Claims Division. Denying a person the right to call admissible evidence which that person wished to call to rebut a claim is a denial of natural justice; so is denying a party the right to tender admissible evidence in support of his or her claim. It is also a denial of natural justice to deny an adjournment when the refusal of the adjournment may be said to bring about a miscarriage of justice. However, for the purpose of an appeal under s 39(2), an appellant needs to demonstrate not only legal error but an error that is material to the outcome of the decision appealed from; that is, the decision must be one which is vitiated by error: Hamod v Suncorp Metway Insurance Ltd [2006] NSWCA 243 at [11] and Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LJRA 409 at 419, which has been subsequently cited with approval in the Court of Appeal. However, a simple error of law is not a ground for appeal from the Small Claims Division: Habra v Reinke [2005] NSWSC 1090, a decision of Malpass AsJ. 17 The vitiating legal error must equate with the denial of procedural fairness. There are two aspects to procedural fairness summed up in two Latin maxims. The first one is nemo debet esse judex in propria sua causa: no-one ought be the judge in his own cause. There is no suggestion that that principle has been infringed. The other principle is audi alteram partem: hear the other side. The court or tribunal must hear each side of a case and consider the evidence adduced by each party. The current appellant relies upon a breach of that principle."
5. At [35] of the same decision, I said this: "However, I come back to the primary point that this was decision of the Small Claims Division of the Local Court, constituted by an assessor with obvious long experience and expertise in dealing with claims for property damage and the like resulting from collisions between motor vehicles. His own two decisions to which I have referred have persuasive influence because they are based on binding or very persuasive authority themselves. Even if there had been some unsoundness of reasoning adopted by the assessor, that does not constitute an error of law. It could also not be an error as to jurisdiction and certainly could not amount to a denial of procedural fairness. Illogicality and perversity equally do not involve a denial of procedural fairness."
6. Mischief often infects reasoning by taking shortcuts. For example, there is a fondness to refer to the first Latin maxim nemo debet esse judex in propria sua causa as the 'rule against bias'. Bias has a number of meanings, only some of which are governed by the principle that nemo debet esse judex in propria sua causa. A man is the judge in his own cause when he judges something that pertains to him. For example, if I were a shareholder in HHH Superannuation Trust, I would be prevented from hearing this matter if I were an assessor or a magistrate of the Local Court, or indeed hearing this appeal as a judge of this Court. If one of the litigants before me was a close relative, such as a parent, uncle, aunt, child, or grandchild, I could not possibly hear the case because I would be judging a case that was in my own interests, as I would if I were adjudicating any case in which I have a financial or other personal interest. That is what the first rule of natural justice prohibits.
7. Here, there is no suggestion that Day LCM had any personal interest in HHH Superannuation Fund, or had any personal relationship with Mr Huebner or any member of his family, or indeed, that the learned Magistrate had any relationship with Mr Shiv Parihar or his company, which is the defendant in these proceedings. Nor was there any suggestion that any other witness in the case, such as Ms Aisbett, was somebody who was known to or anyone to whom the learned Magistrate was impartial or disinterested.
8. That brings us to the rule that is described as audi alteram partem, "to hear the other side". That is sometimes now called the "fair hearing rule". But again, that often leads to miscategorisation. A dissatisfied litigant can refer to a hearing in which they have not been successful as being "unfair" because the other side won. Again, the concept of fairness involves a number of different things. It might be more convenient to refer to the rule as being one concerned with the denial of due process.

A denial of due process?

1. In three short answers to questions I posed, Mr Huebner exposed the problem with the current appeal. I asked him, firstly, whether the learned magistrate prevented him from putting before the Court all the evidence upon which he sought to rely. Mr Huebner told me that he was permitted to put all the evidence before his Honour that he wished to do so. Secondly, I asked Mr Huebner whether the learned Magistrate permitted him to advance all the arguments that he wished to advance. He said that he was permitted to do so. Thirdly, I asked Mr Huebner whether the learned Magistrate permitted him to answer the arguments put forward on behalf of the defendant. He said that he was permitted to do that. In other words, there was no denial of procedural fairness.
2. One must also bear in mind s35 of the Local Court Act 2007, the provision that regulate proceedings in the Small Claims Division. Leaving aside subsections (1) and (1A), the remaining subsections are these: "(2) Proceedings in the Small Claims Division are to be conducted with as little formality and technicality as the proper consideration of the matter permits. (3) The rules of evidence do not apply to proceedings being heard or other proceedings in the Small Claims Division. (4) Witnesses may not be cross-examined except in circumstances in which, and to the extent to which, the cross-examination of witnesses is authorised by the rules or a practice note. (5) A Magistrate or an Assessor exercising the jurisdiction of the Court sitting in its Small Claims Division may inform himself or herself on any matter relating to proceedings being heard or other proceedings in the Small Claims Division in such manner as he or she thinks fit. (6) Proceedings in the Small Claims Division (other than any judgment given or order made in respect of the proceedings) are not required to be recorded."
3. Those are extraordinary provisions. As general propositions, proceedings in all courts are conducted with formality and the rules of evidence apply in all legal proceedings (the only outstanding exception to that rule is proceedings on sentence in criminal proceedings). At common law, a party has a right to cross-examine any witness called against him or her. The prevention of cross-examination is a major infringement of a person's legal rights. Generally, no court can inform itself of any matter or thing or fact in dispute, unless it is something which could be regarded as common knowledge. For example, courts are permitted to consult maps and to ascertain the distances between places. Courts can take judicial notice of the arrangement of streets in a town, or highways in the State. Courts can also take judicial notice of what day of the week any particular date was. However, courts very rarely take judicial notice of anything other than common knowledge.
4. The ability of a magistrate or assessor sitting in the Local Court to inform himself or herself on any matter in the proceedings being heard is extraordinary. Furthermore, all proceedings in court are generally recorded, because without a recording, it is impossible to know whether a right of appeal exists, but there is no requirement for the recording of proceedings in the Local Court, even though in the current case the proceedings were so recorded.
5. Learned counsel for the Respondent Mr Foley referred to the audi alteram partem rule as the "fair hearing rule". I mention that merely because I intend to quote a part of the submissions put before me by the Respondent which, in my view, are a relatively succinct statement of the law: "(d) The fair hearing rule generally requires the following: (i) prior notice that a decision will be made; (ii) disclosure of information which is relevant to the decision; and (iii) a substantive hearing, oral or written, with a reasonable opportunity for a party to present their case; (see Westlaw AU, The Laws of Australia (at 1 March 2014) 2 Administrative Law, '2.5 Judicial Review of Administrative Action: Procedural Fairness' [2.5.460]; Kioa v West (1985) 159 CLR 550, 587). (e) The content of the fair hearing rule is determined with reference to the statutory context in which the decision is made. In this case, the proceedings were conducted in the Small Claims Division with as little formality and technicality as the circumstances permitted and where the rules of evidence did not apply (see section 35 of the Civil Procedure Act 2005 (NSW) (CPA); Kishore v Transit Systems West Pty Ltd [2022] NSWDC 93 at [19]; Tonab Investments Pty Ltd v Optima Developments Pty Ltd [2015] NSWCA 287, at [100] - [101])."
6. In the following paragraph of his submissions, Mr Foley referred me to the first rule of natural justice which, indeed, does require decision makers to approach their task with an open mind. That rule is infringed if a fair minded and informed observer might apprehend that a decision maker might not be impartial. There are a number of authorities which establish that possibility. Mr Foley referred me to Michael Wilson and Partners Pty Ltd v Nicholls & Ors (2011) 244 CLR 427, in the judgment of Gummow ACJ, Hayne, Crennan, and Bell JJ. However, that apprehension of pre-judgment can only occur before the matter is adjudged. It is very easy for a losing party to say that because his or her arguments were not accepted by the tribunal of fact, whether it be an assessor, a magistrate, a judge, or a jury, that the tribunal of fact was biased, but that is merely because they do not agree with the outcome of the proceedings.
7. There was nothing to suggest on the transcript or on what has been put before me that there was any suggestion of any pre-judgment of the issues tendered between the plaintiff and the defendant in the Small Claims Division of the Local Court. Clearly, the plaintiff was unsuccessful. I have spent considerable time, over a day of court time, listening to the arguments put forward by Mr Huebner on behalf of the position he adopts. I can understand his argument, and I can understand the argument that he says was not accepted in the Local Court. However, the rule of procedural fairness requires a fair hearing not a fair outcome: Attorney General (NSW) v Quin (1990) 170 CLR 1 at [35-36]; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 81 ALJR 515 at [25]. As was pointed out in SZBEL at [25], for this reason: "It is, therefore, not to the point to ask whether the Tribunal's factual conclusions were right. The relevant question is about the Tribunal's processes, not its actual decision."
8. There can be a fair hearing, a trial in which each party is permitted to adduce all the evidence and arguments that they wish, but the result is not one that a party anticipates or is satisfied with. That does not mean that because one body of opinion was preferred to another body of opinion that the Court or decision maker was biased in the first party's favour, or exercised bias in adopting the arguments raised by the first party, as distinct to those raised by the other party.
9. The plaintiff referred to his affidavit affirmed on 29 October 2021, supporting the summons to commence the appeal in this Court. At [3], the appellant outlined the "basis of the appeal". The paragraph is this: "The appeal against the judgment is based on the non observance of the following principles: - Fair and proper procedure is to be used when making a decision including the fair consideration of all submissions made by all parties. - The decisions are made without bias. - The decisions must have some basis in fact or reasoning. Otherwise, a coin could be tossed rather than a court decision sought. - The rationale for a decision must be appropriately related and fitting to the issue that is decided. For example, it could not be reasoned that a fridge does not have to cool because it was delivered on a rainy day. - People have to be treated equally in a court of law."
10. I hazard, in relation to the last point made in that summary of the appeal brought by the plaintiff, that there is no suggestion that his Honour in the court below treated the plaintiff any differently to the defendant. That is what being treated equally in court means. If I am an accused person in criminal proceedings, I have the same rights as every other accused people, even though some might think that I was entitled to greater rights and others to lesser rights because of my status. There is no "all people are equal before the law" once status does matter. That is what equality before the law is about: people being equal whether they are powerful or impotent; whether they are rich or poor; whether they are young or old; whether they are attractive or ugly; whether they are fit, firm and healthy or frail and infirm. Everyone is equal and has to be treated equally in law.
11. The problem here is that the essential issue tendered was "what should an auditor do?" There were three bodies of opinion put before the Local Court. The first was the plaintiff's allegations as to what the auditor ought to have done. The second was the auditor's own defence of what he had done, and the third was the report of the expert retained by the defendant, Ms Aisbett.
12. His Honour accepted Ms Aisbett as an expert. What the appellant did not put before the Local Court, but has told me about, is the plaintiff's own expertise. The plaintiff, it would appear, has an expertise similar to the defendant, and perhaps Ms Aisbett, having a background in commerce and accounting. For that reason, HHH Superannuation Trust was not engaging any accountant or bookkeeper or tax agent, but rather, the work appears to have been done by Mr Huebner himself as a result of his background and training. However, the extent of his background and training was not put before the Local Court.
13. As the learned Magistrate said in his reasons at p 18, commencing at line 6: "The report [of Ms Aisbett] expresses clear opinions based on the relevant auditing standards, legal requirements and industry practice. I am satisfied, therefore, that the expert report of Ms Aisbett is an expert report. I note there was no competing expert evidence offered by the plaintiff, but rather there is a commentary and critique from an unqualified litigant."
14. That commentary and critique came from Mr Huebner. Mr Huebner eschewed, for reasons which might be clear to him but are completely unclear to me, informing the Local Court of his expertise. When confronted by warring litigants, one saying one thing and the other saying the opposite, it is quite common for courts to look at an independent source to try to ascertain where the truth of a matter may lie. Here the learned Magistrate turned to the report of Ms Aisbett, which on its face purported to comply with the expert code of conduct, an attempt to be impartial. She answered questions posed in the favour of the defendant, rather than the plaintiff. That led the learned Magistrate to his ultimate conclusion, which is this: "Accordingly, I am satisfied that the defendant has discharged his retainer, in that the work undertaken was compliant with the regulatory framework and was fit for purpose. I am satisfied that the plaintiff has not discharged his evidentiary burden to prove on the balance that the defendant did not act according to the retainer, according to his professional standards, and accordingly, to the regulatory framework set out in detail in the defendant's expert evidence."
15. That led to his finding for the defendant. The decision may well be wrong in fact. The decision may well be wrong in law. But, an error of fact or an error of law is not a denial of procedural fairness. The appellant was offered the opportunity that the defendant was offered, to put all the evidence he wished to rely upon and all arguments he wished to rely upon before the Local Court. That was allowed. The fact that the Court got it wrong may be the result of some unintentional defect of reasoning in his reasoning process, or may become an unintentional bias that he favoured somebody who held herself out as being independent of the dispute joined between the plaintiff and the defendant. In either case, that is not a denial of procedural fairness, it is only an erroneous conclusion based on a misapprehension of what the evidence was.

Damages

1. To recover a monetary sum, damages must be proved by the plaintiff. The plaintiff sought the recovery of fees paid to the auditor. The audit was necessary. It was required by federal legislation. The income tax returns of HHH Superannuation Trust had to certify that there had been an audit of the superannuation funds. Without that certificate, the income tax return would not have been processed by the ATO, or things may result from the defect, caused by the failure to certify that there had been an audit. However, the ATO appears to have accepted the 2018 and 2019 audit carried out by the defendant, because no further audit report was asked for by the ATO in respect of either of those financial years. In other words, although the plaintiff may have been dissatisfied with some of the content of the audit reports, the audit reports still did their job, permitting the ATO to process the 2018 and 2019 income tax returns of HHH Superannuation Trust. No further disbursement was incurred in seeking to rectify the defect complained of in the auditor's reports. There has been no total failure of consideration. As a matter of law, the plaintiff has not incurred any damage by paying the audit report fees.
2. The other head of damage was, of course, the travel costs claimed, but not vouched for, by, for example, the mileage covered by the plaintiff in a motor car, or the amount of petrol involved, or the accommodation costs for staying somewhere near Sylvania, or the meals run up at commercial establishments whilst the plaintiff and his wife were staying at Sylvania or near Sylvania.
3. A party is under an obligation to mitigate his, her, or its, loss. These meetings could have been held electronically for reasons I have already given, or could have been conducted by the circulation of appropriate minutes, and if, as argued by the plaintiff, there needed to be an explanation by him to other directors, that could have been provided to them in writing, insofar as his daughter may not have lived with him and his wife near Orange. The costs claimed are, in my view, completely unrecoverable. In other words, the defendant has failed to establish any economic loss claimed as a result of the defects alleged in the auditor's reports, and therefore, the plaintiff failed to prove a necessary concomitant on his claim, that is, actual damage flowing therefrom.

Conclusion

1. The case brought in this Court fails because the plaintiff has not established on the balance of probabilities that there was denial of procedural fairness. For those reasons, the appeal is dismissed. I order the plaintiff to pay the defendant's costs of the appeal. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 July 2022