[1967] HCA 31
Spencer v Commonwealth of Australia (2010) 241 CLR 118
[2010] HCA 28
State of New South Wales v Williams [2014] NSWCA 177
Sydney Seaplanes Pty Ltd v Page (2021) 106 NSWLR 1
[2021] NSWCA 204
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Wickstead v Browne (1992) 30 NSWLR 1
Judgment (19 paragraphs)
[1]
inc Company of Australasia Ltd (1932) 48 CLR 391; [1932] HCA 52
Brimson v Rocla Concrete Pipes Ltd (1982) 2 NSWLR 937
Bull v Attorney-General (NSW) (1913) 17 CLR 370; [1913] HCA 60
Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48
Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1
DRJ v Commissioner of Victims Rights (No 2) (2020) 103 NSWLR 692; [2020] NSWCA 242
Ekes v Commonwealth Bank of Australia [2014] NSWCA 336
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69
Grannall v C Geo Kellaway and Sons Pty Ltd (1955) 93 CLR 36; [1955] HCA 5
Karpik v Carnival plc [2023] HCA 39
Leerdam v Noori (2009) 255 ALR 553; [2009] NSWCA 90
Martin v Western District of Australasian Coal & Shale Employees Federation (1934) 34 SR (NSW) 593
Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30
Mutual Life & Citizens' Assurance Co Ltd v Evatt (1970) 122 CLR 628; [1970] HCA 46
New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act (2016) 260 CLR 232; [2016] HCA 50
Penthouse Publications Ltd v McWilliam [1991] NSWCA 222
Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19
Preston v Star City Pty Ltd [1999] NSWSC 1273
Qantas v Rohrlach [2021] NSWSC 260
R v Porter (2004) 61 NSWLR 384; [2004] NSWCCA 353
Re Galtari Pty Ltd (in liq) [2018] NSWSC 917
Redland City Council v Kozik [2024] HCA 7
Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397; [1967] HCA 31
Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28
State of New South Wales v Williams [2014] NSWCA 177
Sydney Seaplanes Pty Ltd v Page (2021) 106 NSWLR 1; [2021] NSWCA 204
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Wickstead v Browne (1992) 30 NSWLR 1; [1992] NSWCA 272
Texts Cited: New South Wales Legislative Assembly, Second Reading Speech, Entertainment Industry Act 2013 (NSW) (Hansard), 14 August 2013
Category: Procedural rulings
Parties: Angus & Julia Stone Pty Ltd (First Plaintiff)
Angus John Stone (Second Plaintiff)
Julia Natasha Stone (Third Plaintiff)
A&J Touring Pty Ltd (Fourth Plaintiff)
Angus Stone Pty Ltd (Fifth Plaintiff)
Julia Stone Pty Ltd (Sixth Plaintiff)
HNOE Limited (First Defendant)
Manton Music Management Pty Ltd (Second Defendant)
Timothy Manton (Third Defendant)
Representation: Counsel:
S J Philips (Plaintiffs)
P W Flynn SC (Defendants)
The Second and Third Plaintiffs, Angus and Julia Stone, are siblings who have enjoyed substantial success as musicians in Australia and overseas. They have recorded and performed as a duo, as well as individually. Mr Stone resides in New South Wales, and Ms Stone resides in Tasmania. The remaining Plaintiffs are companies which are under the control of one or both of them. Those corporate plaintiffs are incorporated in Australia, with a registered address in Victoria.
The First Defendant (HNOE) is a company incorporated under the laws of England and Wales, with a registered address in London. It operates an international talent management agency business, which trades as "TaP Management", with headquarters in London.
On 14 August 2015, Mr Stone, Ms Stone and the First Plaintiff, Angus & Julia Stone Pty Ltd (AJSPL), entered into a management agreement with HNOE (the Management Agreement). By clause 1, HNOE was appointed to act as the sole and exclusive manager in relation to all the activities of Mr Stone and Ms Stone in the entertainment industry as a musical duo throughout the world. The Management Agreement was subsequently varied to extend to their respective solo careers.
The Management Agreement provided for the payment of commission to HNOE in consideration of its services. There were different rates of commission in respect of different activities.
Clause 3.6 of the Management Agreement provided that HNOE was obliged to provide the services of the Third Defendant, Tim Manton, at HNOE's own cost at all material times during working hours throughout the term of the agreement.
Mr Manton is an artist manager who resides in New South Wales. He is the sole director of the Second Defendant, Manton Music Management Pty Ltd (MMM), which is a company incorporated in Australia.
Pursuant to an agreement between MMM and HNOE dated 4 October 2013 (the MMM Agreement), MMM promised that Mr Manton would provide "artist management services as the lead manager of Angus & Julia Stone". An "inducement letter" of the same date, from Mr Manton to HNOE, is annexed to the MMM Agreement. By that letter, Mr Manton agrees, inter alia, to perform all obligations contained in the MMM Agreement which are required to be performed by him in order for MMM to perform its agreement with HNOE.
[4]
Relevant Principles for Determining Application
The Defendants seek an order for summary dismissal of the proceedings against the Second and Third Defendants pursuant to rule 13.4(1)(b) of the UCPR, which provides as follows:
13.4 Frivolous and vexatious proceedings
(cf SCR Part 13, rule 5; DCR Part 11A, rule 3; LCR Part 10A, rule 3)
(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings -
…
(b) no reasonable cause of action is disclosed,
…
the court may order that the proceedings be dismissed generally or in relation to that claim.
The only claims pleaded against the Second and Third Defendants are claims based upon an alleged contravention of the EI Act. The Defendants contend that those claims do not disclose a reasonable cause of action. Further and in the alternative to the application for summary dismissal, the Defendants seek an order striking out that part of the pleading, and submit that leave to replead the claim based on the EI Act should not be granted.
The court's powers to summarily terminate proceedings must always be exercised with caution: Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 at [24] per French CJ and Gummow J.
A court whose jurisdiction is regularly invoked in respect of a local defendant should not decide the issues raised in those proceedings in a summary way except in the clearest of cases, where there is a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way: Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57] per Gaudron, McHugh, Gummow and Hayne JJ.
Before exercising the power of summary dismissal, the Court needs to be satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion that the lack of a cause of action is clearly demonstrated: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129; [1964] HCA 69 per Barwick CJ. That does not mean that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. In General Steel Industries, Barwick CJ observed (at 130) that argument, "perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed".
[5]
Relevant Provisions of EI Act
The CLS pleads that each of the Defendants breached sections 6, 9 and 11 of the EI Act.
However, section 9 is purely a definitional provision; and the Plaintiffs accepted at the hearing of this application that there is no pleaded basis for a contravention of s 6 (which requires that a performer representative "who receives money on behalf of a performer" must, among other things, establish a trust account which "must be kept exclusively for the purpose of money received on behalf of a performer").
The hearing of this application proceeded on the basis that the only breach of the EI Act which was alleged against any of the Defendants was a contravention of section 11. Consistently with this, it is proposed in the Draft ACLS that the references to contraventions of ss 6 and 9 of that Act be deleted.
For those reasons, I have considered the claims in respect of the EI Act solely by reference to section 11.
Before considering the particular allegations in the CLS (and Draft ACLS), I have set out below relevant provisions of the EI Act.
Section 4 of the EI Act defines a "performer" as meaning "any actor, singer, dancer, acrobat, model, musician or other performer of any kind who enters an entertainment industry agreement with a performer representative".
An "entertainment industry agreement" is defined in section 4 of the EI Act as "an agreement between a performer and a performer representative to provide one or more of the services referred to in section 5". Section 5 both identifies the relevant services and defines a "performer representative" by reference to such services. It provides as follows:
Performer representative
In this Act, a performer representative means a person who, for financial benefit, provides or agrees to provide one or more of the following services to a performer (whether or not the agreement also provides for other services to be provided) -
(a) seeking or finding work opportunities for the performer,
(b) negotiating terms of an agreement for, and the conditions of, a performance,
(c) finalising arrangements relating to the payment of the performer,
(d) negotiating arrangements relating to the attendance of the performer at a performance,
(e) administering the agreement between the performer and an entertainment industry hirer,
(f) making arrangements for publicity attendances and related publicity responsibilities of the performer,
but does not include a person who does so solely as an employee of any such representative.
[6]
The Pleading of the EI Act Claim
The Plaintiffs plead that each of Mr Stone and Ms Stone is a "performer" and each of HNOE, MMM and Mr Manton is a "performer representative" within the meaning of the EI Act.
In the CLS, the only agreement which is alleged to be an "entertainment industry agreement" is the Management Agreement, which was an agreement between Mr Stone, Ms Stone, AJSPL and HNOE. However, the Draft ACLS proposes to amend the Plaintiffs' claim to plead, relevantly, as follows (noting that the mark-up in the Draft ACLS has been retained below, in order to show both the existing CLS and the scope of the proposed changes to it):
"24. Pursuant to ss 4 of the EI Act:
a. the Manton Julia Agreement is an entertainment industry agreement for the purposes of the EI Act;
b. the Management Agreement and the MMM Agreement are, or constitute, is an entertainment industry agreement for the purposes of the EI Act; …"
As I have noted above, the MMM Agreement was an agreement between HNOE and MMM, pursuant to which MMM promised to provide the services of Mr Manton as lead manager for Mr Stone and Ms Stone. The "Manton Julia Agreement" was an agreement between the Sixth Plaintiff, Julia Stone Pty Ltd (JSPL), and Mr Manton which was entered on about 12 March 2013. Ms Stone was the sole director and secretary of JSPL at this time. The Plaintiffs sought and were given (by consent) leave to re-open after the hearing of the application in order to lead evidence of this agreement.
The critical parts of the Plaintiffs' pleading of their claims arising from the alleged breach of section 11 of the EI Act are paragraphs 28, 28A and 29 of the Draft ACLS. Those paragraphs are in the following terms (again, retaining the mark-up, in order to show the existing form of the CLS and the proposed amendments):
"28. Section 11 of the EI Act relevantly:
(a) provides that a performer representative must not demand or receive a fee or other remuneration from a performer under an entertainment industry agreement that exceeds the capped amount (being 10% pursuant to the EI Regulations); and
(b) imposes a statutory duty on a performer representative not to demand or receive a fee or other remuneration from a performer under an entertainment industry agreement that exceeds the capped amount of 10%.
28A During the period between August 2012 and June 2023, the Defendants provided management services to the Plaintiffs pursuant to the Manton Julia Agreement, the Management Agreement and the MMM Agreement, and demanded and received fees or other remuneration from the Plaintiffs under those agreements.
29. To the extent that HNOE, MMM and Manton have received in excess of 10% of the total amount payable to the Plaintiffs for any performances in respect of which HNOE, MMM and Manton provided services under the Manton Julia Agreement, Management Agreement, or the MMM Agreement, HNOE, MMM and Manton:
a. have been in breach of ss 9 and 11 of the EI Industry Act and the statutory duty imposed by that section;
b. have been in breach of their obligations pursuant to s 6 of the EI Act to establish a trust account for the benefit of the Plaintiffs;
c. is are obliged to pay damages for breach of statutory duty, or to account, or provide restitution, to the Plaintiffs for the amounts received by HNOE, Manton and MMM in excess of 10% of the total amount payable to the Plaintiffs for any such performances, being (at least) $1,670,880.09.
Particulars
Schedule C hereto contains the summary of all the commissions charged by HNOE, excluding the Back Catalogue commissions accounted for in Schedule B, which are in excess of 10% of the total amount payable to the Plaintiffs."
[7]
Defendants' Contentions
The Defendants submitted that the claims in relation to an alleged contravention of the EI Act were doomed to fail for three main reasons:
1. first, MMM and Mr Manton could not have breached section 11 by receiving remuneration "under an entertainment industry agreement" with Mr Stone and Ms Stone, since neither of them was a party to any such agreement and therefore did not receive any remuneration "under" any such agreement;
2. secondly, HNOE could not have breached section 11 by receiving remuneration under the Management Agreement, since HNOE is a foreign corporation, the Management Agreement is governed by foreign law, and all remuneration received by HNOE under the Management Agreement was received in London, and s 11 should be construed as having no application in such circumstances; and
3. thirdly, even if it were reasonably arguable that any of the Defendants breached section 11 of the EI Act, such a breach is incapable of giving rise to a private claim by the Plaintiffs for damages or restitution.
I consider each argument in turn below, by reference to both the CLS and the Draft ACLS.
[8]
Was a fee received "under an entertainment industry agreement"?
The existing CLS identifies only one agreement (namely, the Management Agreement) as having been an "entertainment industry agreement" within the meaning of the EI Act (CLS [24(a)]). The Management Agreement is pleaded to be an agreement between the First to Third Defendants and HNOE (CLS [10]). Accordingly, neither MMM nor Mr Manton is alleged to be a party to this "entertainment industry agreement".
The Defendants contended that the allegation in the CLS that MMM and Mr Manton breached the section 11 of the EI Act by receiving commission from the Plaintiffs is doomed to fail, by reason that:
1. section 11 prohibits a performer representative from receiving a fee or other remuneration from a performer "under an entertainment industry agreement" in excess of the capped amount, and MMM and Mr Manton could not have received, and did not receive, any amount "under" the Management Agreement, since they were not parties to it; and
2. section 9 defines the "capped amount" by reference to "any performances in respect of which the performer representative provided services under an entertainment industry agreement", and neither MMM nor Mr Manton could have provided, or did provide, any services "under" the Management Agreement.
At the hearing of the application, the Plaintiffs advanced two main arguments in response.
First, the Plaintiffs submitted that the words "under an entertainment industry agreement" in section 11 should be read attaching to the "performer" rather than the "fee or other remuneration". On the basis of this construction, the Plaintiffs contended that each of Mr Stone and Ms Stone was a "performer under an entertainment industry agreement", because each had entered into the Management Agreement. It was said to follow that if MMM and Mr Manton received any fee or other remuneration from Mr Stone or Ms Stone (whether or not such fee was paid pursuant to the Management Agreement), then MMM and Mr Manton had, for the purposes of s 11, received a fee "from a performer under an entertainment industry agreement".
I do not consider this to be an open interpretation of section 11. The term "performer" is defined in s 4 of the EI Act as meaning "any actor, singer, dancer, acrobat, model, musician or other performer of any kind who enters an entertainment industry agreement with a performer representative" (emphasis added). That is, a "performer" for the purposes of the EI Act is a performer of the type described who has entered into an entertainment industry agreement. Given this is so, it would be redundant for the words "under an entertainment industry agreement" in s 11 to be read as indicating that this provision applied to a performer who has entered into an entertainment industry agreement. Instead, those words are read more naturally as applying to the subject matter of the prohibition, namely, the demand or receipt of a fee or other remuneration. It follows that s 11 only applies where a fee or other remuneration is demanded or received "under an entertainment industry agreement".
[9]
Do the Management Agreement and the MMM Agreement together constitute an "entertainment industry agreement"?
In response to the Defendants' contention that the only pleaded "entertainment industry agreement" was one to which neither MMM nor Mr Manton was a party, the Plaintiffs advanced an argument that an "entertainment industry agreement" within the meaning of section 4 of the EI Act could be constituted by "more than one (cognate or supplementary) agreement". They submitted that:
"On this construction, an agreement between a principal performer representative and a sub-contracting performer representative could, together with an agreement between the principal performer representative and the performer, comprise an entertainment industry agreement for the purposes of the EI Act."
The Plaintiffs further submitted that, on the facts of this case, it is "at least strongly arguable that, for the purposes of the EI Act, the MMM Agreement and the [Management] Agreement are two interlocking and co-dependent contracts which together form (or satisfy the definition of) an 'entertainment industry agreement'."
No such pleading is advanced in the existing CLS. However, consistently with the submission outlined above, the Draft ACLS contains a proposed allegation that "the Management Agreement and the MMM Agreement are, or constitute, an entertainment industry agreement for the purposes of the EI Act" (see paragraph [46] above).
The Defendants, in a supplementary submission served after the Draft ACLS was provided to the Court, advanced a number of arguments as to why the proposed amended pleading was doomed to fail.
First, the Defendants submitted that the MMM Agreement could not possibly be an agreement "between a performer and a performer representative" within the meaning of the definition of "entertainment industry agreement" because none of the Plaintiffs was a party to it.
However, the Draft ACLS does not allege that the MMM Agreement, considered individually, constituted an entertainment industry agreement, but rather that the MMM Agreement and the Management Agreement together constitute such an agreement.
Secondly, the Defendants contended that the MMM Agreement and the Management Agreement cannot together constitute an "entertainment industry agreement" because the terms of the Management Agreement, to which each of Mr Stone and Ms Stone was a party, could not be varied or supplemented by another agreement to which neither was a party.
[10]
Is there a viable claim in respect of the Manton Julia Agreement?
The Draft ACLS contains allegations that the Manton Julia Agreement is an "entertainment industry agreement" for the purposes of the EI Act ([24(a)]); that during the period between August 2012 and June 2023, the Defendants "provided management services to the Plaintiffs pursuant to the Manton Julia Agreement, … and demanded and received fees or other remuneration from the Plaintiffs under" this agreement ([28A]); and that to the extent that MMM and Mr Manton have received in excess of 10% of the total amount payable to the Plaintiffs for any performances in respect of which MMM and Mr Manton provided services under the Manton Julia Agreement, they have been in breach of s 11 of the EI Act ([29]).
The Manton Julia Agreement is alleged to have been entered between JSPL and Mr Manton in around March 2013. Clause 2.1 of the Manton Julia Agreement provides that JSPL appoints Mr Manton on an exclusive basis to manage the activities of Ms Stone as a solo artist in the music industry throughout the world, for the Term (being a period of three years commencing on 1 August 2012: cl 3.1). Clause 4.1 provides that, subject to certain specified exceptions, JSPL agrees to pay Mr Manton, in consideration of the services to be provided by him under the agreement, a commission of 20% of all amounts (less only GST) received by JSPL in respect of the activities of Ms Stone as a solo artist throughout the world.
In a supplementary submission, the Defendants argued that the proposed cause of action in respect of the Manton Julia Agreement was not viable, for two main reasons.
First, the Defendants pointed out that, on the basis that (as pleaded) the Manton Julia Agreement was entered on about 12 March 2013, it was entered before the commencement of the EI Act (on 1 March 2014). They submitted that it was therefore an "existing entertainment industry agreement" within the meaning of clause 5 of Schedule 2 of the EI Act. This clause provides as follows:
5 Existing entertainment industry contracts
(1) Section 38 of the 1989 Act and clause 4 of the Entertainment Industry Regulation 2004, as in force immediately before the repeal of that Act, continue to apply in respect of an existing entertainment industry contract that was in force immediately before that repeal.
(2) Section 10 of this Act does not apply in respect of an existing entertainment industry contract.
(3) An existing entertainment industry contract ceases to be an existing entertainment industry contract on the earlier of -
(a) the end of the term of that contract (not including any period of renewal or extension provided for in that contract), or
(b) the day that is 12 months after the date on which this Act commences.
[11]
Issue regarding the extraterritorial application of EI Act
The Defendants submitted that the EI Act, on its proper interpretation, did not apply extraterritorially to regulate entertainment industry agreements governed by a foreign law, or to regulate performer representatives located overseas. On that basis, the Defendants contended that the EI Act could have no application to the conduct of HNOE under the Management Agreement, which is governed by English law (cl 12.11)
The Defendants led evidence that:
1. at the time of entering the Management Agreement, HNOE had its headquarters in and was operating from London;
2. the Management Agreement was executed by Mr Stone and Ms Stone in Los Angeles, California, where Mr Manton was residing at that time;
3. the Management Agreement appointed HNOE as the sole and exclusive manager of Mr Stone and Ms Stone, in relation to all of their activities in the entertainment industry "throughout the world";
4. at the time of entry into the Management Agreement, Mr Stone and Ms Stone were building on their success internationally, which included signing a recording agreement with a highly regarded producer and record company in the United States, recording their successful album Angus & Julia Stone in Los Angeles (which was released around the world in August 2014), enjoying significant chart success in various countries, and undertaking two global tours as well as performances at major international festivals; and
5. payments of commission were received by HNOE in a bank account in England.
The Defendants submitted as follows:
"Put simply, on the proper construction of the EI Act it was not the intention of the Parliament to set a worldwide cap on entertainment industry commissions, wherever in the world they are received, and regardless of the law which the parties have chosen to govern the receipt of those commissions. Nor did the Parliament intend to elevate the Secretary of the NSW Department of Consumer Service to be a global regulator of entertainment management agreements."
It should be noted at the outset that the issue arising for consideration is not an issue regarding the competence of the Parliament of New South Wales to enact legislation which has an extraterritorial operation, but whether the EI Act should be construed as having such operation: see DRJ v Commissioner of Victims Rights (No 2) (2020) 103 NSWLR 692; [2020] NSWCA 242 at [128]-[141] per Leeming JA (Meagher JA agreeing).
[12]
Does a private cause of action arise from any breach of section 11?
The Defendants contended that, even if there were a reasonably arguable basis for alleging that the Defendants contravened section 11 of the EI Act, there was no viable cause of action arising from that contravention.
The Plaintiffs' CLS and Draft ACLS advance a claim for "damages" for breach of statutory duty, as well as a claim that the Defendants are "obliged to account or provide restitution".
[13]
Claim for damages for breach of statutory duty
As the Defendants noted, a claim for damages for breach of statutory duty appears to be the main cause of action relied upon by the Plaintiffs, as this was the predominant focus of the Plaintiffs' submissions at the hearing of the application. Consistently with this, the Draft ACLS (unlike the existing CLS) now contains express allegations that the Defendants have breached section 11 of the EI Act "and the statutory duty imposed by that section" and "are obliged to pay damages for breach of statutory duty".
The Defendants submitted that any claim for breach of statutory duty was doomed to fail. In particular, they submitted that it is a question of statutory construction whether the breach of a statutory provision gives rise to a private right of recovery, and that in the present case there is a clear legislative intent not to grant such a right. This intent was said to be apparent from the rights which are (and which are not) created by the EI Act. In particular:
1. the EI Act specifies (in section 25(3)) only one circumstance in which this Court may order a performer representative to pay compensation to a person who "has sustained loss or damage as a result of the unlawful conduct" of the performer representative, namely, where the Secretary of the Department of Customer Service has brought a proceeding in this Court in order to obtain, and has obtained, an "entertainment industry prohibition order" which prohibits the person from carrying on the business of a performer representative or being a director of a corporation that carries on such a business; and
2. the only right which is conferred by the EI Act on a performer to commence a proceeding against a performer representative is a right to bring a proceeding for payment of a civil penalty against a performer representative for the contravention of various provisions of the EI Act, which do not include s 11 (see section 43(1)-(2)).
In Martin v Western District of Australasian Coal & Shale Employees Federation (1934) 34 SR (NSW) 593 at 596, Jordan CJ observed that if a statute creates a new duty, "the question whether a person who suffers damage by reason of a breach of the new duty, may maintain an action in the ordinary courts for the breach depends upon the intention to be extracted from the statute when read as a whole, having regard to its general scope and purview as well as to its particular provisions". His Honour observed that no single feature - "other than a provision dealing expressly with the point" - can be conclusive.
[14]
Restitution
As I have noted above, there is another separate cause of action in respect of the breach of section 11 which is raised by the CLS and the Draft ACLS: namely, a claim for restitution. This claim is also referred to in the Summons which, relevantly, seeks a declaration to the effect that the Plaintiffs have breached s 11 of the EI Act by charging and receiving commission in respect of the capped amount, and an order that the Defendants "provide restitution to the Plaintiffs with respect to [their] breaches of the … EI Act".
The Defendants' supplementary submissions in response to the Draft ACLS adverted to, but did not address, this claim. At the hearing of the application, the Defendants made the following remarks about this claim:
"Now, we don't understand the cause of action in restitution because there is no pleading, for example, of some kind of unjust factor. If our friends were trying to make some kind of ‑ first of all, there is no contract. So it is not money paid under a contract. There is no pleading of any unjust factor. The way it is pleaded is because they're in breach of a statute which creates offences, therefore, without more, ipso facto, a restitutionary obligation arises. Now, that doesn't disclose a cause of action because the statute does not create the private right of action in restitution."
I accept the submission that, as is plainly the case, the "statute does not create the private right of restitution". However, the submission that a claim for restitution requires the identification of "some kind of unjust factor" elides two distinct issues which arise in respect of such a claim.
First, in order to establish a prima facie entitlement to restitution, it is necessary to establish "the existence of a qualifying or vitiating factor falling into some particular category", such as "mistake, duress or illegality": Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [150] per curiam; referring to David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 379; [1992] HCA 48 per Mason CJ, Deane, Toohey, Gaudron and McHugh JJ. Secondly, where the plaintiff establishes the existence of such a vitiating factor, the defendant may seek to displace that prima facie entitlement by pointing to circumstances which the law recognises would make an order for restitution unjust: David Securities at 379.
[15]
Position of corporate Plaintiffs
Finally, the Defendants argued that the corporate Plaintiffs (being, AJSPL, JSPL and the Fourth and Fifth Plaintiffs) could not bring a claim for breach of statutory duty. That was because the class of persons whom the EI Act was intended to benefit were "performers" and the definition of "performer" - which referred to an "actor, singer, dancer, acrobat, model, musician or other performer of any kind" - could only apply to natural persons. In response, the Plaintiffs have included in the Draft ACLS an allegation that the corporate Plaintiffs, being corporations which were controlled by Mr Stone and/or Ms Stone, which were authorised by them to enter into an entertainment industry agreement on their behalf, "are, or should be deemed to be, performers for the purposes of the EI Act". There is an evident difficulty with this pleading, namely, that neither the Fourth nor Fifth Plaintiff is alleged to have in fact entered into an entertainment industry agreement on behalf of Mr Stone or Ms Stone. Further, I accept that there is force in the Defendants' submission that the definition of "performer" is framed in terms which are incapable of applying to a corporate entity. However, I consider that there would be at best "marginal utility" in determining whether a corporation can bring a claim for breach of statutory duty in respect of the EI Act, in circumstances where each of the corporate Plaintiffs also advances a claim for restitution, arising from the same factual allegations, and I am not satisfied that those claims in restitution (while inadequately pleaded in their current form) ought be summarily dismissed. In that regard, the CLS (and Draft ACLS) pleads, and the Defendants do not dispute, that each of the corporate Plaintiffs made payments in respect of demands which are alleged to have been made in breach of section 11 of the EI Act.
However, I accept the Defendants' submission that the claim by the Fourth to Sixth Plaintiffs against HNOE for breach of contract does not disclose a reasonable cause of action. None of those entities is alleged to have been a party to the Management Agreement. Although each is alleged to have made payments to HNOE under the Management Agreement, those payments are alleged to have been made in respect of invoices which were issued to the First to Third Plaintiffs under the Management Agreement. The fact that the First to Third Plaintiffs arranged their affairs so that payment obligations under the Management Agreement were made by the Fourth to Sixth Plaintiffs does not make those corporate entities a party to the Management Agreement. Any amended pleading should address this issue by making clear that the claim by the "Plaintiffs" for loss and damage suffered as a result of HNOE's breach of contract (CLS [21]) is a claim by the First to Third Plaintiffs alone.
[16]
Conclusion on Summary Dismissal / Strike Out
The Defendants have not established that any claim for restitution or breach of statutory duty which is based on the alleged contravention of the EI Act is doomed to fail. However, I have accepted that, as outlined above, the existing pleading is deficient in various respects. Accordingly, the Plaintiffs should be given the opportunity to bring an application for leave to amend their Summons and/or List Statement, in order to address such deficiencies.
[17]
Claim for a Permanent Stay
Having regard to the conclusions I have reached above, the application for a permanent stay can be dealt with briefly.
The Defendants seek a stay under section 67 of the Civil Procedure Act, which gives the Court a broad power to "stay any proceedings before it, either permanently or until a specified day". The application was brought primarily on the basis that cl 12.11 of the Management Agreement provides for the High Court of Justice in London to have exclusive jurisdiction, and that the parties to that agreement should be held to their bargain.
There were two main issues that arose with respect to the stay application: first, whether, on its proper construction, clause 12.11 of the Management Agreement is an exclusive jurisdiction clause; and secondly, if it is, whether the Plaintiffs have established "strong reasons" for not being held to the bargain in cl 12.11.
As regards the first issue, clause 12.11 relevantly provides that "this agreement shall be subject to English Law and the High Court of Justice, Strand, London shall be the sole court of competent jurisdiction." The Plaintiffs emphasised that the parties chose to use the phrase "competent jurisdiction" rather than "exclusive jurisdiction", and submitted that the clause should be construed as representing an (impermissible) attempt to oust the jurisdiction of this Court, which was therefore unenforceable.
I do not accept this submission. As the Plaintiffs acknowledged, the construction of such a clause is to be determined in accordance with the usual principles applying to the construction of a commercial contract: Qantas v Rohrlach [2021] NSWSC 260 at [31]-[32]. Hammerschlag J there summarised those principles as follows:
"In a commercial contract, the meaning of the words chosen by the parties is determined objectively by reference to its text, context, and purpose, the question being what a reasonable person would have understood them to mean. Preference is given to a construction supplying a congruent operation to the various components of the whole and so as to avoid commercial inconvenience. Where language is open to more than one construction, the Court will prefer a construction which avoids consequences which are capricious, unreasonable, inconvenient or unjust: see Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99 at 109; McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 at 589 [22]; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22]; Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530 at 559 [82]; Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522 at 528 [15]; Electricity Generation Corporation Ltd v Woodside Energy Ltd (2014) 251 CLR 640 at [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at 117."
[18]
Conclusion and orders
Although I have determined not to make orders for the summary dismissal of the proceeding or for a permanent stay, I have determined that there are deficiencies in the pleading of the Plaintiffs' claims in the CLS, which need to be addressed. Further, in determining not to order the summary dismissal of the claims against the Second and Third Defendants, I have taken into account the materials provided to the Court by the Plaintiffs after the hearing of the application, including the Draft ACLS and the accompanying submissions. The Plaintiffs have not identified any reason why they did not take steps to formulate a proposed form of amended pleading prior to the hearing of the application on 1 May 2024, in circumstances where the Defendants filed their application on 15 March 2024 and their submissions on 26 April 2024.
Having regard to those matters, I consider that the appropriate course is to award the Defendants the costs of their application up to 1 May 2024, and that there be no order for costs of the application thereafter.
For the reasons set out above, I make the following orders:
1. The Plaintiffs file any application for leave to amend the Summons and/or the Commercial List Statement by 7 June 2024, such motion to be returnable on 14 June 2024.
2. The Notice of Motion filed by the Defendants on 15 March 2024 otherwise be dismissed.
3. The Plaintiffs pay the costs of the Defendants' Notice of Motion up to 1 May 2024, and there be no order as to costs of the Notice of Motion after that date.
4. The proceeding be stood over for directions on 14 June 2024.
[19]
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: 24 May 2024
Parties
Applicant/Plaintiff:
Angus & Julia Stone Pty Ltd
Respondent/Defendant:
HNOE Limited
Legislation Cited (11)
Entertainment Industry Regulation 2014(NSW)
New South Wales Legislative Assembly, Second Reading Speech, Entertainment Industry Act 2013(NSW)
(New South Wales Legislative Assembly, Second Reading Speech, Entertainment Industry Act 2013(NSW)
The Management Agreement was terminated on about 2 June 2023.
The Plaintiffs commenced these proceedings on 31 January 2024. They have brought a claim against HNOE for breach of the Management Agreement, alleging that commission was overcharged in respect of their "Back Catalogue". The amount of such overpayment is alleged to be "at least $1,109,898.33 in the period between November 2015 and the date of these proceedings".
In addition, the Plaintiffs have brought a claim against HNOE, MMM and Mr Manton, alleging that each of them has breached the Entertainment Industry Act 2013 (NSW) (EI Act) by receiving fees or other remuneration in excess of the "capped amount" specified in the EI Act, and that each is "obliged to account, or provide restitution to the Plaintiffs" for the amounts received in excess of that capped amount, with the amount of such excess being pleaded to be "(at least) $1,670,880.09".
By Notice of Motion filed on 15 March 2024, the Defendants seek a permanent stay of the proceedings pursuant to section 67 of the Civil Procedure Act 2005 (NSW). Further and alternatively, the Defendants seek an order that the claims against MMM and Mr Manton be summarily dismissed under rule 13.4(1)(b) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR); and an order that the paragraphs of the Commercial List Statement which plead a claim arising in respect of the EI Act be struck out.
The basis for the application for a permanent stay of the proceedings is that clause 12.11 of the Management Agreement provides as follows:
"It is agreed between us that this agreement shall be subject to English Law and the High Court of Justice, Strand, London shall be the sole court of competent jurisdiction."
The Defendants argue that the Plaintiffs should be held to this agreement unless "strong reasons" are shown for allowing the proceedings in this Court to continue. In response, the Plaintiffs argue that there are "strong reasons" for allowing the matter to proceed in this Court, in particular because the proceedings involve two defendants who are not parties to the Management Agreement (namely, MMM and Mr Manton) and involve claims in respect of a breach of NSW legislation, namely, the EI Act.
The Defendants did not contend that, if the Plaintiffs' claim against HNOE for breach of the Management Agreement were heard in London, the High Court of Justice would be able to, or would, determine the Plaintiffs' claim against each of the Defendants in respect of the EI Act. Instead, the Defendants argued that the EI Act claim was patently hopeless and liable to be struck out; that, because this was the only claim pleaded against MMM or Mr Manton, the proceedings against them should be summarily dismissed; and that this would leave the claim for breach of the Management Agreement, which was brought solely against HNOE, and would mean that the only reasons advanced for not holding the parties to the exclusive jurisdiction clause in that contract were without substance.
It is therefore necessary to approach the issues arising on this application by considering, first, whether the claim in respect of the EI Act is liable to be struck out and whether the proceedings against MMM and Mr Manton should be summarily dismissed; and secondly, and in the light of the answers to the preceding issues, whether the proceedings should be permanently stayed.
The Defendants' application was heard on 1 May 2024. Following the hearing, the Plaintiffs sought leave to re-open their case to lead evidence of a further management agreement to which Mr Manton was a party and also sought leave to provide supplementary submissions which attached a draft form of Amended Commercial List Statement (Draft ACLS). The Defendants did not oppose this leave being granted, provided that they were afforded an opportunity to lead evidence and serve submissions in response.
When considering the issues regarding strike out and summary dismissal, I have had regard to both the existing form of the Commercial List Statement (CLS) and the Draft ACLS. In referring to this document as a Draft ACLS, I note that the Plaintiffs stated, in their supplementary submissions in reply, that they "do not (at this stage) seek leave to file" the Draft ACLS, which they say has been "proffered … as an example of the sort of revised pleading which the Plaintiffs could seek leave to file (in due course) if the Court were minded to strike out aspects of the existing [CLS] and leave to re-plead were to be granted".
Once it appears that there is a real question to be determined, whether of fact or law, and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91; [1949] HCA 1 per Dixon J.
Kirby P observed in Wickstead v Browne (1992) 30 NSWLR 1 at 5-7; [1992] NSWCA 272 that common experience teaches that it is usually more efficient and just to consider the viability of a cause of action when the facts said to support it are adduced and the suggested action can be judged with a full understanding of all relevant evidence. Although his Honour was in dissent in Wickstead, his comments were endorsed on appeal by Deane, Toohey and Gaudron JJ (High Court, 30 April 1993, unrep), and have subsequently been cited with approval: see, for example, Bakewell v Anchorage Capital Master Offshore Ltd [2019] NSWCA 199 at [37]-[41] per Bell P (Macfarlan and White JJA agreeing).
There is greater scope for summary determination where the viability of a cause of action depends on a question of law, and no factual questions are involved.
In Leerdam v Noori (2009) 255 ALR 553; [2009] NSWCA 90 at [75], Macfarlan JA (with whom Spigelman CJ and Allsop P agreed) referred to the various formulations of the relevant test which were set out in General Steel Industries, and continued as follows:
"… Particular caution is required where factual questions are involved as it is difficult to predict in advance of a final hearing the precise manner in which the evidence will unfold. Whilst caution is also required where, as here, the application turns on questions of law and there is no reasonable prospect that deficiencies in what is pleaded will be able to be cured by amendment, opportunities to summarily dismiss or strike out claims will arise more frequently."
Macfarlan JA noted (at [76]) that General Steel Industries was a case which turned on a question of law. In that case, Barwick CJ, having explained the test to be applied, proceeded to address the argument put on behalf of the Commissioner for Railways (NSW): namely, that the Commissioner was an authority of the State of New South Wales within the meaning of sections 125 and 132 of the Patents Act 1952 (Cth) and that therefore no action could be brought against him for patent infringement in connection with the use of railway carriages, since those carriages were being used for the service of the State. Barwick CJ accepted this argument and accordingly determined (at 137-138) that the pleading did not disclose a reasonable cause of action; that this was not a case in which the plaintiff by amendment of the pleading could improve its position; and that, consistently with the principles outlined in the judgment, orders should be made striking out the pleading and dismissing the plaintiff's claim on the basis that it was "manifestly groundless" and that to allow it to proceed "would involve useless expense".
Whether the viability of a claim depends on an issue of fact or law (or both), the issue remains, in each case, the same: namely, whether there is a high degree of certainty about the outcome if the proceeding were allowed to go to trial. The Court must exercise the power of summary dismissal with "exceptional caution", and only where it is satisfied as to "the demonstrated certainty of the outcome of the litigation, as opposed to its prospects of success": Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19 at [30] per Leeming JA (Macfarlan and Simpson JJA agreeing).
It follows that the power conferred by the rule "is not to be used in cases of doubt or difficulty or where the pleading raises a debatable question of law": Dey v Victorian Railways Commissioners at 91 per Dixon J. Once it appears that there is a real question to be determined, whether of fact or law, and the rights of the parties depend upon it, it is not competent for the Court summarily to dismiss the proceedings: Dey v Victorian Railways Commissioners at 91 per Dixon J; see also State of New South Wales v Williams [2014] NSWCA 177 at [71] per Emmett JA (Macfarlan JA and Simpson J agreeing) and Ekes v Commonwealth Bank of Australia [2014] NSWCA 336 at [88] (Bathurst CJ, Beazley P and Emmett JA).
Even where the viability of a claim depends on a proposition of law apparently precluded by existing authority, that is not necessarily the end of the matter, since existing authority may be overruled, qualified or further explained: "Summary processes must not be used to stultify the development of the law" (Spencer v Commonwealth at [25] per French CJ and Gummow J).
In Penthouse Publications Ltd v McWilliam [1991] NSWCA 222, Priestley JA (with whom Meagher JA and Waddell AJA agreed) said that on an application of this nature, the Court should adopt a "liberal construction" of the statement of claim (at 5), and should summarily dismiss the proceeding only if it is plain to the Court that "on no reasonable view of the attacked pleading is there any point in allowing the case to go to trial" (at 6). His Honour observed that:
"As Chitty J said in Republic of Peru v Peruvian Guano Company (1887) 36 Ch D 489, under the Judicature Act rules 'the pleading will not be struck out unless it is demurrable and worse than demurrable' (at 496). From Chitty J's subsequent observations it seems clear, as is noted in The Supreme Court Practice 1991, (London 1990) Volume 1 p 362, that by 'worse than demurrable' he meant beyond saving by legitimate amendment; see also Mutual Life and Citizens Assurance Co Ltd v Evatt (1970) 122 CLR 628 at 631 (PC)."
That is, in order to justify the exercise of the Court's powers, the pleadings must be "so bad that no legitimate amendment could cure the defect": Brimson v Rocla Concrete Pipes Ltd (1982) 2 NSWLR 937 at 942. Where a defect in the pleading can be cured by amendment, the Court ought to grant leave to amend, rather than exercise the power to strikeout: Re Galtari Pty Ltd (in liq) [2018] NSWSC 917 at [75] per Gleeson JA; referring to Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 536-537 per Kirby P (Hope and Samuels JJA agreeing).
As I have explained above, the critical provision for the Plaintiffs' claim against the Defendants is section 11(1) of the EI Act, which provides as follows:
11 Fees of performer representatives
(1) A performer representative must not demand or receive a fee or other remuneration from a performer under an entertainment industry agreement that exceeds the capped amount, unless the agreement is an entertainment industry managerial agreement and the additional services under the agreement are provided.
Maximum penalty--100 penalty units.
The proviso to this section refers to an "entertainment industry management agreement", which is defined in section 10(1) of the EI Act as follows:
(1) An entertainment industry managerial agreement is an entertainment industry agreement-
(a) that is in writing, and
(b) under which the performer representative agreed to provide services in relation to the management of the reputation, career or career development of the performer that are in addition to the services referred to in section 5, and
(c) that fixes the fees payable by the performer in respect of the services specified in the agreement, and
(d) that includes an additional fee acknowledgement.
The CLS pleads (at [24(a)], [27]) that the Management Agreement is an "entertainment industry agreement" within the meaning of section 4, and is not an "entertainment industry management agreement" within the meaning of s 10. The Defendants did not advance any submission on this application that s 10 of the Act applied. It follows that the terms of the proviso in s 11 may be put to one side for present purposes.
Section 11 prohibits a "performer representative" from demanding or receiving a fee under an "entertainment industry agreement" which "exceeds the capped amount". The "capped amount" is defined in s 9(1)(a) of the EI Act as, relevantly, "the percentage, prescribed by the regulations, of the total amount payable to the performer for any performance in respect of which the performer representative provided services under an entertainment industry agreement". The prescribed percentage of the total amount payable to a performer for any performance was specified by reg 4 of the Entertainment Industry Regulation 2014 (NSW) and subsequently reg 4 of the Entertainment Industry Regulation 2020 (NSW). Those regulations are in substantially identical terms. The 2020 version of the Regulation is as follows:
4 Fees of performer representatives
(1) For the purposes of section 9(1)(a) of the [EI] Act, the following percentages of the total amount payable to a performer in respect of a performance are prescribed -
(a) in the case of a performance involving live theatre or a live musical or variety performance (being an engagement that does not involve film, television or electronic media) - 10% for a period up to 5 weeks and then 5% for a period after 5 weeks,
(b) in all other cases (including an agreement involving film, television or electronic media) - 10%.
(2) For the purposes of subclause (1), the following amounts (being amounts payable to performers) are to be excluded when calculating the total amount payable to a performer in respect of a performance -
(a) travelling and meal allowances,
(b) holiday pay,
(c) long service leave and superannuation payments,
(d) overtime or penalty payments that are paid on an irregular basis, other than payments resulting from negotiations undertaken by the performer representative on the performer's behalf with the relevant entertainment industry hirer or venue representative,
(e) award or minimum payments in respect of rehearsals.
In the 2014 version of the Regulation, the only difference in the wording is the insertion of the word "any" in paragraph 4(1)(a) and at the beginning of each of paragraphs 4(2)(c)-(e).
The Plaintiffs plead that the relevant prescribed percentage in respect of all of their performances is the percentage specified in reg 4(1)(b), namely, 10%.
Secondly, the Plaintiffs contended that MMM and Mr Manton did in fact receive fees "under" the Management Agreement, even if they were not parties to it.
The evidence on the application regarding this issue is limited.
For example, there was a handful of documents relating to the payment of commissions for the period from January to June 2019. On 18 November 2019, Mr Caniglia, who was the accountant for the Plaintiffs, sent an email addressed to Mr Stone, Ms Stone, Mr Manton and a representative of HNOE, Ms Esterhuizen, attaching a statement showing "total commissions payable to TAP [HNOE] from A&J for the half year is AUD $136,590.80 (no GST)". He asked each of Ms Esterhuizen and Mr Manton to "please raise and send through your commissions invoices when you get a chance". He also noted that "after the 50/50 split", the commission was payable as follows:
"50% payable to TAP [HNOE] - $68,295.40 no GST
50% payable to TIM [Mr Manton] - $68,295.40 no GST"
The source of the "50/50 split" appears to be the MMM Agreement, which provided that in consideration of the services provided by Mr Manton under that agreement, MMM was entitled to invoice HNOE for "a sum equal to fifty per cent (50%) of the Net Angus & Julia Stone Commission" (defined as meaning "management commission actually received by [HNOE] during the Term directly and identifiably in respect of the artists professionally known as Angus & Julia Stone"): cll 1.6, 4.1, 4.1.2.
A subsequent email from Mr Caniglia to Mr Stone, Mr Manton and Ms Esterhuizen, which was dated 27 June 2022, and which dealt with commission for the period from January to March 2022, also referred to a "50/50 split" of commission between HNOE and MMM and attached a "Manton Music Management invoice" (which was not in evidence).
Those documents might be read as suggesting that either HNOE gave a direction to the Plaintiffs that amounts for commission which were specified in invoices issued by HNOE pursuant to the Management Agreement were to be paid by the Plaintiffs paying 50% of such moneys to HNOE and 50% to Mr Manton, or that there was some arrangement between Mr Manton and the Plaintiffs whereby Mr Manton himself would send invoices to the Plaintiffs for 50% of that amount.
Paragraph 17 of the CLS (which was not the subject of any strike out application) pleads that the Plaintiffs have paid the amounts in respect of commissions payable pursuant to clause 6.3 of the Management Agreement which are set out in Schedule A to the CLS. Schedule A identifies amounts said to have been "paid to TAP [HNOE] / MMM" as well as amounts said to have been paid "to MMM but not to TAP". That is, a part of the CLS which is not the subject of any strike out application alleges that the amounts which have been paid by way of commission under the Management Agreement have, in part, been paid to MMM. For the purposes of this application, I proceed on the basis that there is a factual dispute as to whether, and if so to what extent, moneys were paid by the Plaintiffs to MMM in satisfaction of their obligation to pay commission under the Management Agreement.
One further matter which should be noted is that Mr Caniglia's firm, the Gild Group, was acting as the accountant for MMM and Mr Manton, as well as for the Plaintiffs. Further, the Gild Group took over this role from a firm called White Sky Accounting, which had acted for the Plaintiffs up until around 2018. It is Mr Manton's evidence that White Sky had also acted for him in this period. It is likely that the records of both firms would shed light on the financial arrangements for the payment of commission, and the invoices rendered and payments made throughout the relevant period.
Given the lack of evidence regarding these matters which was available on this application, I do not consider that it has been demonstrated to the requisite high degree of certainty (Agar v Hyde at [57]) that the allegation that MMM and Mr Manton received payments "under the Management Agreement" is doomed to fail. Depending on the evidence which emerges through interlocutory processes, it may be open to the Plaintiffs to establish that, as alleged in paragraph [17] and Schedule A of the CLS, some part of the commissions paid by the Plaintiffs pursuant to the Management Agreement were in fact paid by them to MMM and Mr Manton.
The proposed pleading in the Draft ACLS raises both a factual question regarding the relationship between the contractual arrangements entered between the Plaintiffs and the Defendants and a legal question regarding the proper interpretation of the definition of "entertainment industry agreement".
As regards the factual issue, the evidence on the application was limited in scope.
Mr Millett of HNOE deposed that "Mr Manton and TAP [HNOE] began providing management services to Ms and Mr Stone in around March 2013". There is no evidence on this application of the nature of the arrangement that was entered between Ms Stone, Mr Stone, HNOE and Mr Manton in March 2013, including whether it was in writing or oral, or the terms of this arrangement. As discussed further below, the Plaintiffs led evidence, after the hearing of the application, of a written agreement which appears to have been entered in March 2013, but it was an agreement solely between the Sixth Plaintiff, JSPL, and Mr Manton, and does not refer either to Mr Stone or to HNOE.
There plainly was some form of arrangement in place between Mr Stone, Ms Stone, Mr Manton and HNOE prior to 4 October 2013, being the date when the MMM Agreement was executed. That is because, by that agreement, HNOE promised to render a statement to MMM during each year of the Term of the agreement detailing "management commission actually received by [HNOE] during the Term directly and identifiably in respect of the artists professionally know as Angus & Julia Stone", and agreed to pay 50% of this commission to MMM, for the services of Mr Manton "as the lead manager of Angus & Julia Stone": cll 1.3, 1.6, 2.1.1, 3.2, 4.1.2. This suggests that by October 2013, there was already an arrangement in place whereby Mr Manton would act as lead manager of Mr Stone and Ms Stone, and whereby Mr Stone and Ms Stone would pay commission to HNOE for Mr Manton's services.
The MMM Agreement which was entered by MMM and HNOE on 4 October 2013 annexed two "Inducement Letters" of the same date, which were sent from Mr Manton to HNOE and were signed by him. Relevantly, Mr Manton:
1. confirmed that MMM was entitled to his sole and exclusive services throughout the world as an "artist manager";
2. agreed to be bound by the terms of the MMM Agreement, including any provisions relating to him "directly or indirectly in any way";
3. promised to discharge, to the best of his ability, "any and all obligations and undertakings contained in the [MMM] Agreement insofar as the same are required to be performed and discharged by [him] in order to enable [MMM] to perform the [MMM] Agreement"; and
4. stated that, in the event that MMM ceased to be entitled to his services or refused to supply those services, HNOE would be entitled, at its election, "to treat [Mr Manton] as a party to the [MMM] Agreement and to enforce the same directly against [him]", and promised that, in those circumstances, he "will do all acts and things to give to [HNOE] the same rights and benefits as [HNOE] would have had pursuant to the [MMM] Agreement if [MMM] had continued to perform the same".
The Management Agreement was executed on 14 August 2015. However, cl 3.6 provided that HNOE agreed to provide the services of Mr Manton "throughout the Term", and clause 2 provided that the Term was "deemed to have commenced on 1st March 2013". Those matters are again consistent with there having been an arrangement, from March 2013, between Mr Stone, Ms Stone, HNOE and Mr Manton whereby Mr Manton would act as manager for Mr Stone and Ms Stone in return for commission being paid to HNOE for Mr Manton's services.
Clause 3 of the Management Agreement set out the services to be provided to Mr Stone and Ms Stone, which included:
1. supervising all of the activities of Mr Stone and Ms Stone in the entertainment industry throughout the world;
2. supervising the promotion and publicity of Mr Stone and Ms Stone in all relevant media;
3. negotiating and liaising with record companies, publishers, sponsors, merchandisers, booking agents, promoters or other similar entities; and
4. consulting with Mr Stone and Ms Stone on a regular basis and formulating plans and directions for the development of their careers.
Clause 9.1(c) of the Management Agreement provided that Mr Stone, Ms Stone and AJSPL had the right to terminate the agreement if Mr Manton's services became unavailable:
"You shall be entitled to terminate the Term of this agreement by notice in writing in the event that the services of Tim Manton are not available for a continual period in excess of eight (8) weeks…"
The Management Agreement did not refer to the terms of the MMM Agreement (which was in existence at the time of the parties' entry into the Management Agreement). However, it is apparent from the material discussed above in relation to invoicing and payment that the Plaintiffs were aware that Mr Manton and MMM had an entitlement to 50% of the commission payable under the Management Agreement. In addition, the Plaintiffs appear to have received invoices rendered by MMM and Mr Manton for commission.
Having regard to these matters, I am not satisfied that there is a high degree of certainty that the Plaintiffs will be unable to establish that the Management Agreement and MMM Agreement together constituted an arrangement pursuant to which services of the type described in section 5 of the EI Act were provided to Mr Stone and Ms Stone by Mr Manton and MMM.
That leaves the legal issue whether it is reasonably open for the Plaintiffs to argue that for the purposes of the EI Act, such an arrangement is capable of constituting an "entertainment industry agreement".
The Plaintiffs submitted that the EI Act is protective and remedial legislation and, as such, should not be given a narrow construction. Section 3 of the EI Act states that the objects of the Act are to "provide effective, fair and consistent regulation of the entertainment industry" and "to provide protections for performers". A frequently cited statement of the approach to the interpretation of remedial legislation is that of Isaacs J (in dissent) in Bull v Attorney-General (NSW) (1913) 17 CLR 370 at 384; [1913] HCA 60. His Honour noted that the legislation under consideration in that case was "a remedial Act, and therefore, if any ambiguity existed, like all such Acts should be construed beneficially", adding:
"This means, of course, not that the true signification of the provision should be strained or exceeded, but that it should be construed so as to give the fullest relief which the fair meaning of its language will allow."
As Gageler J observed in New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act (2016) 260 CLR 232; [2016] HCA 50 at [92], the principle that beneficial legislation is to be construed beneficially is a manifestation of the more general principle that all legislation is to be construed purposively. While remedial legislation is to be given a broad, beneficial construction, that principle "is not a trump which overrides all other principles of statutory construction, and does not produce the result that purpose and context are to be disregarded when determining legal meaning": Sydney Seaplanes Pty Ltd v Page (2021) 106 NSWLR 1; [2021] NSWCA 204 at [85] per Leeming JA.
As a starting point, I accept that the phrase "an agreement between a performer and a performer representative" is more naturally read as referring to a single agreement to which each of the performer and performer representative is a party, rather than two related agreements, which do not have common parties.
However, the Act does not use the word "contract". Instead, it uses the word "agreement". The use of this term may indicate that the Act was intended to apply to some form of agreement or arrangement between a performer and a performer representative which did not meet all of the requirements for a legally binding contract between a performer and performer representative. That might include because there was an intermediary placed between the performer and the performative representative, who promised to provide the services of the performer representative to the performer, and to invoice for the commission, part of which was then paid to the performer representative. I am not satisfied, to the requisite high degree of certainty, that an argument that the arrangements of the type which I have described above are incapable of constituting, together, "an agreement between a performer and a performer representative to provide one of more services referred to in section 5" of the EI Act.
The question of the proper interpretation of the definition of "entertainment industry agreement" and in particular whether it is capable of applying to an arrangement consisting of two interrelated contracts is a debatable question of law, which should be considered and determined in the light of the particular factual circumstances of this matter.
Finally, the Defendants contended in their supplementary submissions, provided after the service of the Draft ACLS, that the pleading was in any case deficient, because the only particulars to the allegation that MMM and Mr Manton received fees in breach of section 11 of the EI Act are those provided in Schedule C, and this Schedule is described by the pleading itself as providing a "summary of all the commissions charged by HNOE". The Defendants submitted as follows:
"Accordingly, there is no pleading of receipts, demands or overpayments being made to or by MMM 'under the MMM Agreement' separately from 'under the [Management] Agreement' such as to disclose any reasonable cause of action against MMM for breach of s 11 of the EI Act, even if the MMM Agreement were, or was part of, an 'entertainment industry agreement'."
However, this submission ignores that paragraph 28A of the Draft ACLS contains an allegation that MMM and Mr Manton "provided management services to the Plaintiffs pursuant to … the Management Agreement and the MMM Agreement, and demanded and received fees or other remuneration from the Plaintiffs under those agreements".
I accept that there is a deficiency in the Draft ACLS, in that this proposed form of pleading does not provide any particulars of the "demands" alleged to have been made by MMM and Mr Manton "under" these agreements, or the "payments" alleged to have been received by them. The Plaintiffs explained in their reply submissions that this was because the Draft ACLS was "prepared in a limited time period, without the benefit of fully formed instructions and is not a fully particularized amended pleading". They also stated that they did not seek leave to file the Draft ACLS in this form. The lack of adequate pleading and particularisation of the "demands" made, and payments "received", by MMM and Mr Manton is not a basis for striking out the claim, but is instead a matter which can and should be addressed in any form of proposed Amended Commercial List Statement in respect of which the Plaintiffs subsequently seek leave to amend.
The Defendants argued that, by reason of clause 5, the EI Act did not apply to the Manton Julia Agreement for a one year period from the commencement of the Act until 1 March 2015, and could therefore have no application to any demands made for fees, or any receipt of fees, under that agreement during this one-year period. However, cl 5 does not exempt an "existing entertainment industry agreement" from the operation of the whole of the EI Act, but instead from the operation of s 10 of that Act. Section 10 is pleaded as having no application to the Manton Julia Agreement (Draft ACLS [27]). Instead, the only claim proposed to be advanced in respect of the Manton Julia Agreement is a claim based on a contravention of s 11 of the EI Act (Draft ACLS [29]).
Secondly, the Defendants referred to evidence from Mr Manton, which was to the effect that the last payment made under the Manton Julia Agreement was made on 5 August 2016. They submitted that any claim for overpaid commission made up to that date was statute-barred, whether the claim was for breach of statutory duty or in restitution, since each of those claims has a six-year limitation period (referring to ss 14(1)(a), (b) and (d) of the Limitation Act 1969 (NSW)).
It is not clear whether there is a factual dispute regarding the time at which payments ceased being made under the Manton Julia Agreement. The evidence of Mr Manton, referred to in the previous paragraph, was led after the hearing of the application, in response to the Plaintiffs' reopening so as to lead evidence of the Manton Julia Agreement. The Plaintiffs noted that Mr Manton's evidence establishes that the Manton Julia Agreement continued in operation beyond its specified "Term" (which concluded on 1 August 2015: cl 3.1) and that it was "open to the Court to infer that the agreement continued to operate beyond August 2016".
It is difficult to determine whether there is any viable claim in respect of the Manton Julia Agreement in circumstances where that claim is not raised by the existing CLS, and is foreshadowed in the Draft ACLS but in a rudimentary way, without any material facts pleaded regarding the term of the agreement, or regarding the amounts demanded or paid under the agreement and the dates on which those demands and payments were made. As I have noted above, the Plaintiffs emphasised that the Draft ACLS was put forward "without the benefit of fully formed instructions" and noted that they did not seek leave to file the document in this form. If on further investigations it becomes apparent that Mr Manton's evidence is correct, and the total amount paid to MMM from Ms Stone or JSPL for management commissions is as set out in his affidavit of 10 May 2024 (namely, a total of $1,437.00, all of which was received by 8 August 2016), then it may be that the claim in respect of the Manton Julia Agreement is not ultimately included in any amended form of pleading.
Any consideration of the viability of this claim, and of the application of any limitation period to this claim, should await its proper pleading and particularisation in a proposed form of Amended Commercial List Statement, in respect of which the Plaintiffs bring an application for leave to amend. Accordingly, I have considered the issues of summary dismissal primarily by reference to the proposed pleading in respect of the Management Agreement and MMM Agreement, and without reference to the pleading in respect of the Manton Julia Agreement.
In relation to this issue of statutory interpretation, the Defendants referred to Karpik v Carnival plc [2023] HCA 39 at [19], where the High Court said that there is a presumption that statutes are not intended to apply to matters that, under the rules of private international law, are governed by foreign law. The High Court observed that this presumption is "an interpretive principle only" and "is not a fundamental common law right", adding that: "the application and force of the presumption depends upon the extent to which the provisions of a statute depart from common expectations that Parliament's concern with the subject matter is limited to matters within its territory" (at [19]).
The Defendants contended that the fact that the parties to the Management Agreement expressly chose English law to govern their contract gives rise to a presumption that the EI Act is not intended to apply to acts done by HNOE under the Management Agreement.
In response, the Plaintiffs argued that the EI Act is remedial and beneficial legislation which is intended to provide protections to performers; that the policy of the Act is against the use of private agreements to circumvent its remedial provisions; and that this policy should be given effect in interpreting the statute. In particular, the Plaintiffs referred to and relied upon section 39 of the EI Act, which provides as follows:
39 Contracting out void
The provisions of this Act And the regulations have effect despite any stipulation to the contrary and no contract or agreement made or entered into before or after the commencement of this section operates to annul, vary or exclude any of the provisions of this Act or the regulations.
Further, the Plaintiffs relied on the observations by Toohey, Gaudron and Gummow JJ in Akai Pty Ltd v People's Insurance Co Ltd (1996) 188 CLR 418 at 447; [1996] HCA 39 that "considerations of public policy present in an Australian court may flow from, even if not expressly mandated by the terms of … [a] statute in force in the Australian forum"; and that the courts may thus "disregard or refuse effect to contractual obligations which, whilst not directly contrary to any express or implied statutory prohibition, nevertheless contravene 'the policy of the law' as discerned from a consideration of the scope and purpose of the particular statute".
Having regard to those matters, I consider that there is a debatable question of law as to whether the Act is capable of applying to an entertainment industry agreement with a foreign choice of law clause, that this question should be determined in light of the facts of the case, including an examination of the extent of the connections between the agreement and the forum.
The Defendants also referred to a second presumption articulated in Karpik at [19], namely, the "so-called common law 'presumption' against extraterritoriality - that subject to a contrary intent, words in a statute describing acts, matters or things in general words are to be read so as not to have extraterritorial effect". As the High Court noted, this, too, is "an interpretive principle only". The Defendants submitted that, in the present case, the Court should have regard to section 12(1)(b) of the Interpretation Act NSW (1987), which provides as follows:
(1) In any Act or instrument -
…
(b) a reference to a locality, jurisdiction or other matter or thing is a reference to such a locality, jurisdiction or other matter or thing in and of New South Wales.
The Defendants submitted that the effect of this provision was as follows:
"unless a contrary intention appears (see s 5(2) of the Interpretation Act), the reference to 'agreements' in the definition of 'entertainment industry agreement', [and] the reference to 'person' in [the definition of] 'performer representative', refer to agreements and performer representatives 'in and of' New South Wales".
On this basis, the Defendants submitted that, because the agreement in this case is covered by English law and the performer representative (HNOE) is a company incorporated and operating in the United Kingdom, the EI Act cannot apply to the Management Agreement or HNOE.
The difficulty with this submission is that, as Leeming JA identified in DRJ at [116], "s 12 does not bear its literal meaning" and, in particular, it is a "fallacy" to "read every reference to every locality, every jurisdiction, every matter and every thing in a provision as a reference to that locality, jurisdiction, matter and thing in and of New South Wales". The correct approach is instead to "identify by reference to the statute's context and subject matter the manner by which the generality of the statute is confined to New South Wales, which is normally by a single integer" (emphasis in original): at [113]. If there are two expressions in a statute to which the restriction in s 12 is capable of applying, then "as soon as this restriction is applied to one of these expressions, the prima facie need for a territorial limitation is met and to that extent there is less reason for the other": at [116] per Leeming JA, quoting Dixon J in Barcelo v Electrolytic Zinc Company of Australasia Ltd (1932) 48 CLR 391 at 406; [1932] HCA 52. Accordingly, the task is "to identify the central focus or central conception of the legislation, and require that to bear a connection with New South Wales": at [157].
In DRJ, Bell P (at [35]) described such an integer as the "hinge" around which a particular statute operates, and noted (at [37]) that the "identification of the relevant 'hinge' or 'central conception' is frequently far from straightforward". His Honour emphasised (at [41]) the "complexity and contestability of the analysis" required to determine this issue.
Having regard to those principles, I consider it at least reasonably arguable that the "hinge" around which the EI Act operates is the "performer". A stated object of the EI Act is "to provide protections for performers": section 3(b). The focus of the Second Reading speech was on "the New South Wales entertainment industry", which "makes an important contribution to the vibrant cultural life of New South Wales", and the need for "the protection of performers in their commercial and professional dealings with entertainment industry agents, managers and venue consultants" (New South Wales Legislative Assembly, Second Reading Speech, Entertainment Industry Act 2013 (NSW) (Hansard), 14 August 2013, p 1). The bill was described as implementing reforms "to ensure that the new laws will operate effectively and efficiently and provide comprehensive protections to performers in the industry" (ibid).
In light of those matters, it is reasonably arguable that so long as the individual who is an "actor, singer, dancer, acrobat, model, musician or other performer" is a resident of New South Wales, or who performs or records predominantly in New South Wales, there is no need for either the "entertainment industry agreement" or the "performer representative" to be "in and of" New South Wales. In that regard, the evidence establishes that throughout the relevant period, Mr Stone was a resident of New South Wales. Although Ms Stone resided in Victoria from 2014 to 2022, and has resided in Tasmania since 2022, she gave unchallenged evidence that the "overwhelming majority" of her "recorded performances, songs and records have been written, performed and recorded in New South Wales", and that she has performed in multiple "major tours and concerts" in New South Wales throughout this period. In those circumstances, it is reasonably arguable that there is the requisite geographic connection between the "performers" in this case and New South Wales.
I accept that different considerations apply in respect of section 11(1) of the EI Act, because it creates an offence. In DRJ at [113], Leeming JA observed that there is a "rule of construction" that, in the case of statutes which create offences, "every physical element is prima facie required to be in New South Wales".
This presumption requires "all (but only those) elements of the offence to take place in New South Wales". So, for example, in R v Porter (2004) 61 NSWLR 384; [2004] NSWCCA 353, Spigelman CJ (with whom Barr and Hoeben JJ agreed) determined that, for a charge that a person had, in his or her custody, any thing which may be reasonably suspected of being stolen, what was required was that two elements - the "custody" and the "suspicion" - existed in New South Wales. If this was the case, the offence was complete, and there was no requirement for the "stealing" to have occurred in New South Wales.
The Defendants placed particular reliance on the decision of the High Court in Grannall v C Geo Kellaway and Sons Pty Ltd (1955) 93 CLR 36; [1955] HCA 5 (to which Leeming JA referred in DRJ at [143]). This decision considered section 23 (1) of the Farm Produce Agents Act 1926 (NSW), which relevantly provided that a farm produce agent could not "charge, sue for or recover any fees, charges, commission, reward or other remuneration" for farm produce beyond the prescribed commission, which was 7.5%. A person who resided in Tasmania consigned apples to a farm produce agent in Sydney, after receiving a letter from the agent stating that a rate of 10% would be charged on all consignments. A unanimous High Court (at 52-53) observed that the question whether an offence had been committed under s 23 depended on "the meaning of the word 'charge' in s 23 (1) (s) and upon the application to that meaning of the rule that all offences are local and territorial"; and held that "just as the words in s 23 (1) (a) 'sue for' and 'recover' must be understood as 'sue for or recover in New South Wales', so must the word 'charge' be interpreted as 'charge within New South Wales'". Because the offence of overcharging was held to require communication, and the communication was not effective until the letter was delivered in Tasmania, an essential element of the offence occurred outside New South Wales.
As the Defendants pointed out, there is a parallel between the provision considered in Grannall and section 11 of the EI Act, which, relevantly, makes it an offence for a performer representative to "demand or receive a fee or other remuneration from a performer under an entertainment industry agreement that exceeds the capped amount".
Having regard to the rule of construction outlined above, it would be prima facie necessary to show that each physical element of this offence occurred in New South Wales.
However, it is important to note that section 11 makes it an offence to "demand or receive", not to "demand and receive". The conjunction "or" indicates that it is an offence either to demand a fee or other remuneration under an entertainment industry agreement that exceeds the capped amount, or to receive such a fee or other remuneration.
The physical element of the first of these two alternative offences is the "demand" of the fee from the performer, and of the second is the "receipt" of the fee from the performer. If either of those physical elements occurs in New South Wales, I consider that it is at least reasonably arguable that the requisite territorial connection is established, and that it is unnecessary for the "entertainment industry agreement" under which the fee is demanded or received to be itself in and of New South Wales in order for s 11 of the EI Act to apply.
In the existing CLS, the breach of section 11 of the EI Act is pleaded solely in terms of the Defendants having "received" fees or other remuneration from the Plaintiffs under an entertainment industry agreement in excess of the capped amount. There is no pleading in the existing CLS that the Defendants have breached s 11 by having "demanded" such fees or other remuneration from the Plaintiffs.
As regards the issue of receipt, there is evidence from Mr Millett of HNOE that HNOE issued invoices for "all commission payable for services provided by HNOE, including HNOE's provision of Mr Tim Manton's services through [MMM]" and that the "payments of those invoices, at all times, have been made by the plaintiffs or their representatives to bank accounts nominated by HNOE" which have been, at all relevant times, bank accounts operated in England.
On the basis that this evidence was unchallenged, the Defendants contended that it necessarily followed that any receipt of fees or other remuneration by HNOE occurred outside New South Wales, and therefore section 11 of the EI Act could have no application.
However, the Draft ACLS also adds a proposed pleading that each of the Defendants has breached section 11 of the EI Act by having demanded fees or other remuneration from the Plaintiffs under the pleaded "entertainment industry agreement".
The concept of a "demand" would generally seem to require that a claim for payment be communicated to the person from whom payment is demanded. In Grannall (at 53), the High Court observed that the offence of overcharging required communication of a "claim or demand" to the person in question, and the communication was not effective until it was received by that person. The Court added that it may be that the words "charge" can be "satisfied in some circumstances without communication", observing that a farm produce agent might be, for example, entitled by his relationship with his principal to appropriate funds, to settle liabilities by entries in accounts kept for the benefit of both parties, or in some other way effectively to burden the principal with the amount without communication.
The means by which a demand was made or communicated is plainly a question of fact. Likewise, the existence of arrangements between the parties regarding the making and satisfaction of demands is a question of fact.
It is perhaps not surprising, given that the claim that section 11 was contravened by "demands" is only proposed to be added by the Draft ACLS, that this is not an issue which attracted much attention in the evidence. At present, there is no pleading or particularisation in the Draft ACLS of the means by which the "demands" were made, which is a deficiency in that document and which makes it difficult to assess the issue of where those demands were made.
Clause 6.2 of the Management Agreement provided that the Plaintiffs must appoint a "Bookkeeper", which was White Sky Music at the date of the agreement. Clause 6.3 provided as follows (noting that "we" refers to HNOE and "you" to the First to Third Plaintiffs):
"6.3 We shall provide to the Bookkeeper invoices for the commission payable to us hereunder and our expenses (supported by full vouchers and receipts) and as and when arising which invoices you hereby warrant undertake and agree shall be discharged within fourteen (14) days of receipt of the same and you hereby warrant undertake and agree to instruct the Bookkeeper to make such payments."
Mr Millett of HNOE deposed that HNOE was directed by the plaintiffs "to issue invoices for an amount calculated by the plaintiffs' accountants at White Sky Accounting or the Gild Group", but Mr Millett's affidavit is silent as to the persons to whom, or the means by which, those invoices were sent.
Mr Millett exhibits two invoices to his affidavit, one dated November 2019 and the other dated June 2022. Each required payment of "Angus & Julia Stone - Management Commission" calculated at a rate of 20 per cent. The first is addressed to Mr Stone and Ms Stone, and the second to AJSPL. However, in each case, their address is specified to be the address of their accountants, White Sky Music, in Collingwood, Victoria.
On this basis, the Defendants argued that I should find that all relevant demands were made in Victoria, and that section 11 could not have been breached by such demands having been made, with the result that any claim for breach of s 11 was doomed to fail.
However, I am not satisfied that this contention has been established to the requisite high degree of certainty, for the following reasons.
First, in circumstances where, according to Schedule A, there are more than 150 instances of payments having been made to HNOE or MMM in respect of commission under the Management Agreement, as a result of invoices issued under the Management Agreement, I do not consider that I can draw any conclusion, to the requisite degree of certainty, as to where those demands were made based on the terms of clause 6.3 and based on the limited examples of invoices which are in evidence.
Secondly, even presuming the invoices were all sent to the Plaintiffs' accountants, I was not directed to any authorities relevant to determining whether a demand which is sent to an agent who receives it on behalf of the principal is a demand made in the place where the agent is located or in the place where the principal is located. Without being directed to any such relevant authorities or principles, and given the lack of evidence on this issue, I do not have a sufficient basis to determine, on this application, that it is patently hopeless to contend that invoices which required payment from a performer who was a NSW resident (Mr Stone), and which were sent to the performer's accountant in Victoria, were in fact made demands in New South Wales.
Having regard to those matters, the Defendants have not established that section 11 is incapable of application to any demands made by HNOE under the Management Agreement for the payment of commission by Mr Stone and Ms Stone, and therefore have not established that the claim that this section was breached by HNOE is doomed to fail.
As regards the position of MMM and Mr Manton, it is not clear whether the Defendants were advancing any submission to the effect that any "demands" or "receipts" by those parties occurred outside the forum.
In any case, there is not a sufficient basis for determining any such submission in the Defendants' favour.
Dealing first with "demands", Mr Manton affirmed an affidavit, after service of the Draft ACLS, in which he deposed that "since late 2015", the Gild Group has issued invoices on his and MMM's behalf, and has kept records of the monies received from such invoices. During this period, the Gild Group has also acted for Mr Stone and Ms Stone. If, at a time that Mr Manton and Mr Stone both resided in New South Wales, an invoice was addressed by Mr Manton to Mr Stone, it would seem at least reasonably arguable that any "demand" made by that invoice was made in New South Wales, even if a firm based in Victoria generated the invoice and acted for both sides of the transaction. Further, there is an email in evidence, dated 27 June 2022, showing that the Gild Group emailed an invoice issued by MMM to Mr Stone (which is not attached).
Turning next to "receipts", there is no evidence from Mr Manton as to where any commission which was payable to him was received. This may be explained by the fact that the only allegation in the existing CLS is that MMM and Mr Manton received fees under "the Management Agreement" and the Defendants' position is that any amounts received by them in respect of Mr Manton's work as lead manager for Mr Stone and Ms Stone was not received "under the Management Agreement", but under the MMM Agreement.
However, as I have noted above, the Draft ACLS alleges that the Management Agreement and the MMM Agreement together constitute an entertainment industry agreement, and that each of the Defendants (including MMM and Mr Manton) received fees or other remuneration under this "entertainment industry agreement" in excess of the capped amount.
There is no basis currently to conclude that, insofar as fees were received by MMM and Mr Manton under the MMM Agreement, all or some such fees were received outside New South Wales.
Here, there is no provision of the EI Act dealing expressly with the point. However, as Jordan CJ noted (at 596), the "most important" of the facts which might go to negate the existence of a right of action is "the provision by the statute which creates the new duty of a special means for its enforcement".
An example of the application of this principle is provided by Preston v Star City Pty Ltd [1999] NSWSC 1273. In that case, the plaintiff alleged that in breach of section 70 of the Casino Control Act 1922 (NSW), the defendant induced him to take part in gaming in its casino by informing him that he would be treated as a "high roller" and by supplying him with various privileges, including when the defendant knew that he had suffered substantial gaming losses. Wood CJ at CL determined that a private right to sue for breach of the provision was not conferred by the Act, commenting as follows (at [87]):
"the comprehensive regulatory scheme set up under the Act and Regulations, which includes the establishment of a body charged with monitoring legal casino gaming in the State and supervising compliance by casino operators and staff, and which provides for criminal and civil sanctions, as well as for disciplinary action in the event of any contravention of the Act, Regulations or licence conditions, is such that the requisite legislative intention to confer a private right of action for damages is lacking."
The Defendants submitted that what one sees in the EI Act is a deliberate legislative attempt to confer very limited and specific rights of enforcement upon a performer and that this legislative intention negates any other, more general, rights being conferred on performers by the EI Act by implication, such as would enable the Plaintiffs to bring their claim for breach of statutory duty.
In response, the Plaintiffs relied on the statement by Brennan CJ, Dawson and Toohey JJ in Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410 at 424; [1995] HCA 24, that a cause of action for breach of statutory duty "arises where a statute which imposes an obligation for the protection or benefit of a particular class of persons is, upon its proper construction, intended to provide a ground of civil liability when the breach of the obligation causes injury or damage of a kind against which the statute was designed to afford protection". In respect of that statement, their Honours cited Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397 at 405; [1967] HCA 31. Kitto J there observed that, in determining whether a private right of action for breach of statutory duty exists, the endeavour of the courts is to determine what inference really arises, on a balance of considerations, from the nature, scope and terms of the statute, including the nature of the evil against which it is directed, the nature of the conduct prescribed and the whole range of circumstances relevant upon a question of statutory interpretation.
Relying on these principles, the Plaintiffs submitted that the EI Act imposes an obligation on performer representatives for the protection or benefit of a particular class of persons, namely, performers in the New South Wales entertainment industry; and that it should be inferred from the nature, scope and terms of the statute (including the nature of the conduct to which section 11 is directed, namely, the excessive charging of commission) that it was intended to provide a ground of civil liability if breach of that obligation causes damage of the kind against which the statute was designed to afford protection.
The Defendants submitted, and I accept, that since the question whether a claim for breach of statutory duty is available depends on the interpretation of the statute, it will not be affected by any evidence that may be led at trial, and that the Court therefore presently has all of the information it requires to determine this issue. Further, since each question of law has only one correct answer (Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30), it follows that the assertion that a claim for breach of statutory duty is available in respect of a contravention of the EI Act is, as a matter of law, either right or wrong.
However, the Defendants have not brought an application for, and I am not determining, a separate question on this issue. Instead, the Defendants have brought a summary dismissal application. As Dixon J observed in Dey v Victorian Railway Commissioners (at 91) regarding the application of a materially similar rule providing for summary dismissal:
"It is obvious from the decisions that that rule is intended to apply
only to cases which are really not arguable. It was never intended that
the rule should be applied in cases where under the older practice
demurrer would have been the proper course."
The power conferred by the rule is available where the Court is able to reach "a definite and certain conclusion" that "the lack of a cause of action … is clearly demonstrated": General Steel Industries at 129. It "is not to be used in cases of doubt or difficulty or where the pleading raises a debatable question of law": Dey v Victorian Railway Commissioners at 91.
Having regard to the competing contentions advanced on this issue, I consider that there is a debatable question of law regarding the availability of a private claim for breach of section 11 of the EI Act.
Further, there would be "marginal utility" in determining, on this application, whether or not such a claim for damages for breach of statutory duty is available in the circumstances pleaded in the CLS or Draft CLS, unless the alternative claim for restitution, arising from the same pleaded facts, was itself liable to be summarily dismissed: see Wickstead v Browne at 5 per Kirby P. I consider this alternative claim below.
I accept that neither the existing CLS nor the Draft ACLS identifies the vitiating factor upon which the Plaintiffs rely to establish an entitlement to restitution.
However, as was noted in Perera v Genworth at [34]-[35] per Leeming JA, under the modern pleading rules, the question is not "whether the facts alleged in the count were themselves sufficient to give rise" to a cause of action, but "whether it would be open to the plaintiffs upon the pleading to prove facts at trial which would constitute a cause of action" (citing Mutual Life & Citizens' Assurance Co Ltd v Evatt (1970) 122 CLR 628 at 631; [1970] HCA 46; Wickstead at 16). Accordingly, on a summary dismissal application, it is necessary to consider not only whether the current form of pleading adequately articulates the material facts necessary to establish an asserted cause of action, but also whether it would be open to the plaintiff on the existing form of pleading to lead evidence which might be capable of establishing a cause of action, despite the elements of that cause of action not being fully or adequately pleaded. If so, the Court should not order summary dismissal, but should instead allow the plaintiff an opportunity to amend the pleading in order to seek to address any deficiencies in the articulation of that claim.
In the present case, the CLS and Draft ACLS plead the following material facts:
1. the contractual arrangements in place between the Plaintiffs and the Defendants which are said to constitute an entertainment industry agreement;
2. the statutory prohibition under the EI Act on demands for and receipts of fees or other remuneration under an entertainment industry agreement above a capped amount;
3. the making of demands by the Defendants in contravention of that prohibition; and
4. the receipt of payments from the Plaintiffs in excess of the capped amount prescribed by the Act.
Those material facts, pleaded in support of a claim in restitution, would permit the leading of evidence, including as to the Plaintiffs' state of mind at the time those payments were made, which might be capable of establishing a qualifying or vitiating factor, such as a mistake of law, sufficient to found a claim in restitution (see the recent discussion regarding restitution on the basis of a mistake of law in Redland City Council v Kozik [2024] HCA 7). On the current application, I am not satisfied, to the requisite high degree of certainty, that no such claim is available.
In those circumstances, I consider that the appropriate course is not to order the summary dismissal of the Plaintiffs' claim for restitution, but to provide the Plaintiffs with an opportunity to amend their pleading to address the deficiency in the pleading of that claim, including by specifying the vitiating factor or factors upon which they rely to establish an entitlement to restitution and by identifying the material facts said to establish any such factor. Insofar as the Defendants seek to raise any issue about the viability of the Plaintiffs' proposed amended claim, they will then be at liberty to do so on the hearing of the application for leave to amend.
A reasonable person in the position of the parties would not have understood clause 12.11 to be an attempt to limit the competency of, or oust the jurisdiction of, this Court. Instead, I consider it plain that the stipulation in cl 12.11 that the High Court of Justice in London was the "sole court of competent jurisdiction" was an agreement, intended to be binding as between the parties (but not intended to bind any court), that the High Court of Justice was the only court in which a dispute between them was capable of being prosecuted. This was not an attempt to restrict the ability of any other court to hear such a dispute, but rather was an agreement between the parties that a dispute could not be commenced in, and therefore could not be heard by, any other court. That is, it was, in substance, an exclusive jurisdiction clause.
As regards the second issue, the parties agreed on the applicable principles. In particular, in Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61, Bell P (with whom Bathurst CJ and Leeming JA agreed) observed that the courts have traditionally supported exclusive jurisdiction clauses by "manifesting a strong disposition towards the enforcement of such clauses" (at [76]); and that the courts will, in a commercial dispute involving only the contracting parties, usually give effect to such clauses by staying proceedings commenced in a forum other than the one nominated in the exclusive jurisdiction clause (at [77]), unless "strong reasons" be adduced against a stay (at [78]-[79]). However, the position is more complicated in two situations of particular relevance here: first, where the party commencing proceedings in the face of an exclusive jurisdiction clause seeks to take advantage of what is or may be a mandatory law of the forum; and secondly, where not all parties to the litigation are parties to the relevant jurisdiction clause (at [80]).
As regards the first of those situations, Toohey, Gaudron and Gummow JJ said in Akai v People's Insurance that where a plaintiff seeks to rely on a statute of the forum as conferring a legitimate juridical advantage and the defendant does not lead evidence to establish that foreign court would apply the Act in question as part of the lex causae, the application for a stay is to be approached on the basis that the foreign court would not do so (at 445, 447). Further, their Honours observed (at 447) that, in circumstances where the policy of the Act in question is against the use of private engagements to circumvent its remedial provisions, such a policy militates against a stay. Their Honours said that to grant a stay in such circumstances "would be to prefer the private engagement to the binding effect upon the State court of the law of the Parliament".
As regards the second of those situations, Bell P observed in Australian Health & Nutrition Association v Hive Marketing Group at [81], that where not all parties to the proceeding are parties to the exclusive jurisdiction clause, "two very powerful policy considerations may be in play and, depending on the facts, in tension":
"They are, on the one hand, the desire to and importance of holding commercial parties to their bargain, and, on the other hand, trying to ensure that all aspects of a dispute between all parties (including, relevantly, non-contracting parties) be resolved in one place at the one time, the rationale for this being not only judicial 'tidiness' and 'efficiency' but, perhaps more profoundly, the high desirability of minimising the possibility or prospect of different courts reaching different decisions (whether as to the facts or the law or both) in relation to the same dispute, a consequence apt to undermine confidence in the rule of law were it to materialise."
In the present case, the Plaintiffs seek to take advantage of the EI Act, which is said to be a mandatory law of the forum (particularly having regard to section 39 of that Act); and a number of parties to the proceeding - namely, the Fourth to Sixth Plaintiffs and the Second to Third Defendants - are not parties to the exclusive jurisdiction clause.
These two matters are interrelated. That is because the only claims advanced against the Second to Third Defendants are the claims for breach of statutory duty and for restitution which are made in respect of the alleged breach of section 11 of the EI Act.
The Defendants did not lead any evidence, or make any submission, to the effect that the High Court of Justice in London would apply the EI Act as part of the lex causae. They acknowledged that "being frank, we haven't sought to prove that if there are claims against the second and third defendant that your Honour thought was arguable that the English court could [deal with] that."
For the reasons given above, I have rejected the Defendants' application for the summary dismissal of the claims against them for breach of statutory duty and restitution, which are based on the alleged contravention of section 11 of the EI Act. Given that is so, and the lack of any evidence or submission that any such claim would be able to be pursued in the High Court of Justice in London, I am satisfied, having regard to those claims, that there are strong reasons for refusing to grant a permanent stay of this proceeding.