Not having a go at you Kevin, this is obviously the other pilots perspective as to what happened. I think one problem in circuit work is forming a good understanding of exactly where other aircraft are from radio communications.
STATUS: UNDER REVIEW. OCCURRENCE DETAILS SUBMITTED TO RAAUS: Whilst downwind on with a student, a call was heard from another aircraft (returning from a flight and inbound from the north I heard the inbound call from him and notified our location in the circuit.) notified overhead the field with intention to join " midfield downwind", we notified our position on downwind and requested position of the joining aircraft and to confirm they were number two in the circuit and requested confirmation they had us visual. He said he did not have visual, at which I gave my location downwind turning base, there was no reply, we had just turned base leg and across from our left shot the joining aircraft at which I transmitted "you have just flown past us and you have crossed out path". There was a pause and a response by the pilot of the joining aircraft acknowledging my transmission. We continued on our descent and landed. They landed shortly after.