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[2012] NSWSC 1242
Supreme Court of NSW
2012-07-27
Beech-Jones J
Original judgment source is linked above.
on Juan Entertainment (Second Plaintiff) Armando Christian Perez t/as Pitbull (First Defendant/Cross Claimant) Pitbull Productions Incorporated (Second Defendant) Representation: Counsel: Mr D.E. Baran (Plaintiffs/Cross Defendant) Mr D.B. Studdy SC, Mr S.W. Balafoutis (Defendants/Cross Claimant) Solicitors: Stephen Smart & Associates (Plaintiffs/Cross Defendant) Gilbert + Tobin (Defendants/Cross Claimant) File Number(s): 2009/297624
Judgment 1These proceedings arise out of a cancellation by the defendant, Armando Christian Perez, of a proposed concert tour of Australia in December 2008. The plaintiffs were promoters of that tour.
Pitbull 2There is no settled view of the precise origins of what is now known as rap or hip hop music. At least one of the originating locations was the exotic multicultural mix that is the Bronx area of New York. Amongst the music-rich groups within that area are the African American, West Indian and Latino communities. Reflecting its inner city origins, this form of music is also often referred to as "urban" music. 3Mr Perez commenced performing professionally using the stage name "Pitbull" in 2000. I use that name and his real name interchangeably. He is based in Miami Florida. He writes and performs in a Latino rap style which draws on his Cuban heritage. He writes and records music in Spanish and English. 4Pitbull's first successful commercial recording was an appearance as an album of another artist known as "Luke" in 2000. In 2004 he released his first album entitled "M.I.A.M.I." which achieved "Gold" status in the USA. He released an album of re-mixes from that album entitled "M.I.A.M.I Still" in 2005. 5In 2007 Pitbull came to Australia as part of a touring music festival known as "Roc Tha Block". In 2007, Roc Tha Block toured Sydney, Melbourne, Adelaide, Perth and Auckland. The concerts were held in indoor arena style venues such as Sydney Entertainment Centre. There were a number of "urban" music performers. Pitbull was in the "fourth bill" position out of five. This meant that he was second to appear. The headlining act is usually last to appear. 6In 2007 Pitbull released a further album. As I have stated he was scheduled to tour Australia late in 2008. Prior to then he toured venues in the USA on his "House of Blues" tour and regularly filled venues with a capacity of between 1,000 and 2,500 patrons. 7Since 2008 Pitbull's career has flourished. In 2009 he released the album "Rebelution" which included two USA top ten hits, "I Know You Want Me" and "Hotel Room Service". By February 2011 this album and the singles had sold a combined 7.5million copies by means of digital downloads. He has released a further album and is paid to endorse some well known products. 8Any consideration of the conduct of the various players in the events which led to the cancelled 2008 tour must occur in the context of the state of Pitbull's career and fame as that time and without regard to what has occurred since. As at late 2008 he was an established artist in the USA with a strong following in the young Latino community. He was on the verge of "breaking through" to a wider audience. He had a lesser profile in this country. He was well known to fans of rap or hip hop, but was otherwise not established. He had only toured this country once. The Latino community in this country constitutes a much lower proportion of the overall population than it does in the USA.
Mr Purple 9Mr Perez did not give evidence in these proceedings. Other than in relation to the matter addressed in [97]-[100], it was not suggested that he needed to. As I will explain, all of the relevant dealings on his behalf were conducted by a Mr Barry London also known as "Mr Purple". Since 1993 Mr London has operated a business of providing entertainment agent services to performing artists, including managing bookings and organising tours. He has undertaken this work for Pitbull since 1999. He accompanies Mr Perez and his crew on tours and deals with the local promoters.
The Plaintiffs 10The first named plaintiff, Jaime Fernandez, is a music promoter and DJ based in Perth. For promotions he uses the name "Suave Productions". As a DJ he uses the name "DJ Suave". 11The second named plaintiff, Juan Uribe, is also a music promoter and DJ. He is based in Sydney. He trades under the name "Don Juan Entertainment" and as a DJ is referred to as "DJ Don Juan". He has been involved in the promotion of music for over 18 years with a particular emphasis on "urban" music and Latino music. 12Mr Uribe met Mr Fernandez over the 2008 Easter period. They discussed promoting performances by artists including overseas artists. One of the artists they discussed was Pitbull. 13It was agreed between them that Mr Fernandez would make contact with Pitbull and pursue negotiations over a possible tour. 14On 1 November 2008, Mr Fernandez and Mr Uribe signed an agreement ("the Uribe Subcontract"). Mr Uribe agreed to pay Mr Fernandez an amount described as "$40,000 USD (US dollars) - $60,286.37 AUD (Aus dollars)" on the signing of the contract. In exchange Mr Fernandez undertook and agreed to "provide the selling of the artist 'Pitbull' on the date, at the venue". The date and the venue are left blank in the written agreement, but it appears that it was meant to be a reference to a concert in Sydney on Sunday, 7 December 2008. At that time it was contemplated that Pitbull would perform at least three shows in Australia: Sydney, Melbourne and Perth. This agreement contemplates Mr Uribe and Mr Fernandez being responsible for the costs and profits of the Sydney concert and Perth concert respectively. It also contemplated that another promoter would be found for Melbourne, but that did not eventuate. Instead, Mr Fernandez and Mr Uribe agreed to apportion costs and recovery of profits for the Melbourne concert in the proportions of one-third and two-thirds respectively.
Issues in the proceedings 15There are five issues in the proceedings, namely whether: (1)Pitbull validly terminated the contract under which he agreed to tour Australia. As explained below, the contract was initially at least recorded in a written document executed in November 2008 ("the Agreement"). The plaintiffs assert and Mr Perez denies that it was subsequently varied. (2)Mr Uribe was a third party beneficiary in respect of the Agreement. The contract with Pitbull was governed by the law of Florida. The plaintiffs contend that, even though Mr Uribe was not named as a party, he was an "intended third party beneficiary" and, by the operation of the law of Florida, he can enforce rights conferred by it as though he were a party. (3)In the event that the Pitbull did not validly terminate the contract, the quantum of damages, if any, that are recoverable by either the first plaintiff or both plaintiffs, depending on the outcome of the second issue. (4)Pitbull is entitled to retain a portion of the amount that he was paid in advance of the tour. (5)In the event that I determine that Pitbull did validly terminate the contract, he can recover damages for amounts he contends that he would have received had the tour proceeded. 16In this court the content of the law of Florida is a question of fact and must be proved as such. Even though the Agreement is governed by the law of Florida, the only evidence of that law that has been placed before me concerns the second issue that I have identified above (at [15(2)]). On all other issues the parties have been content for me to proceed on the basis that the law of Florida is the same as it is in Australia (see Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; 223 CLR 331 at [125] per Gummow and Hayne JJ).
Negotiations with Pitbull 17As some of the pre-contractual exchanges may be relevant to resolving the discrepancies between the evidence of Messrs London and Fernandez, and to the determination of the second issue identified above, it is necessary to describe the events prior to the execution of the Agreement in November 2008.
July to October 2008 18On 9 July 2008, Mr Jaime Fernandez sent an e-mail to a Mr Robert Fernandez (no relation), who was the operator of an artist booking and management agency which had links to Pitbull. His e-mail stated: "I wanted to get in contact with you regarding booking Pitbull for an Australian tour. I'm a successful promoter & DJ from Perth, Australia. ... We would love to have him over here, plus I have spoken to several other promoters in other capital cities that would love to have him perform in their capital city. ..." 19There is no evidence that this e-mail was sent to Mr London. On 11 July 2008 a further e-mail was sent to Robert Fernandez suggesting dates between October and November and a budget of $20,000.00 per concert. This e-mail was forwarded by Robert Fernandez to Mr London on the same day. This was the first time that Mr London had heard of Mr Jaime Fernandez and he dealt with his inquiries from that point. 20Mr Fernandez followed up these e-mails in late July and August 2008. In early September 2008 Mr Fernandez and Mr London made e-mail contact. On 4 September 2008 they had a telephone conversation about Pitbull undertaking between three and six concerts "should other capital cities come on board". Mr London stated that he could not commit at that point but would revert shortly. 21On 24 September 2008, and again on 25 September 2008, Mr Fernandez sent Mr London an e-mail which attached a proposed draft contract. On 26 September 2008, Mr London sent Mr Fernandez an e-mail which attached a copy of his proposed draft contract for the Pitbull Tour. Mr London states that around this time he and Mr Fernandez had a conversation to the following effect: "London: 'The draft contract I have provided you has been pre-approved by Pitbull's legal advisors. It contains the standard conditions that we always insist on. Any revisions to it will need to be approved by them. Given the short timetable for the tour, there won't be enough time for that.' Fernandez: 'Ok, we can use Pitbull's standard agreement then.' " 22Mr London was not challenged in cross examination in relation to this conversation. Mr Fernandez did not address it in his affidavits. In cross examination he accepted that Mr London said words to the effect of the first two sentences. I accept that it occurred in the terms stated by Mr London. 23Mr Fernandez states that around 2 October 2008 he advised Mr London that he had confirmed three concerts at US$20,000.00 per concert, namely Perth on Friday, 5 December 2008, Melbourne on Saturday, 6 December 2008, and Sydney on 7 December 2008. Mr London agreed there was a conversation to that effect. There was an e-mail exchange immediately afterwards concerning travel arrangements. 24On 13 October 2008, Mr Fernandez sent Mr London an e-mail which stated in part: "I hope you aren't dealing with other promoters behind my back. ... The truth of the matter is I have been upfront and honest with you in all my dealings. Myself and other promoters here in Australia are working our arses off to get this tour happening, putting in our time, money and energies into getting this to on the road ..." (emphasis added) 25It is not clear what prompted this e-mail, but the plaintiffs rely on the reference to "other promoters" in this e-mail in support of their case on the second issue. 26There were e-mails exchanged addressing the logistics of the tour including the class of travel and the number of people in Pitbull's retinue. One topic was the proposed travelling timetable. In an e-mail dated 22 October 2008 Mr Fernandez sent Mr London a proposed international flight itinerary on United Airlines which involved a proposed departure from Los Angeles on 2 December 2008 arriving in Sydney on the morning of 4 December 2008 (E.S.T), and departing from Sydney to Los Angeles on Wednesday, 10 December 2008. Mr London replied advising that Pitbull could not fly United Airlines because of a "lawsuit pending". On 27 October 2008 Mr Fernandez sent a revised itinerary for flights on Qantas with similar departure times. 27At the end of October 2008, Mr Fernandez and Mr London had a conversation during which they agreed that Pitbull would perform a short 15-20 minute show in the Gold Coast. Mr Fernandez's recollection is that he agreed to pay US$8,000.00 for that show. Mr London's recollection is that the amount agreed was US$10,000.00. It is not necessary to resolve this dispute. The e-mails contemplated the Gold Coast concert occurring between the Sydney concert on the evening of 7 December 2008 and his departure on 10 December 2008. 28On or about 1 November 2008, Mr Uribe and Mr Fernandez entered into the Uribe Subcontract, the terms of which I have summarised above at [14]. Mr Fernandez was reliant on Mr Uribe to provide him with the funds to pay the final instalment due under the contract he later signed with Pitbull. 29On 6 November 2008, Mr Fernandez sent Mr London an e-mail asking him to update Pitbull's websites to include the details of the proposed Pitbull Tour. He also asked to be sent the "updated contracts so I can sign them and transfer you the money". 30On 8 November 2008, Mr London replied to Mr Fernandez with an e-mail which stated "No promotions on our behalf will be done until a deposit is received", and requesting information for inclusion in the final contract. 31On 8 November 2008, Mr London sent Mr Fernandez an e-mail attaching the final version of the Agreement which included the amounts payable. 32On 10 November 2008, Mr Fernandez sent Mr London an e-mail attaching a copy of a press release advertising the proposed tour including the artists, venues and the presence of "his 5 piece live band". Under the heading "PRESS RELEASE" it stated "Suave Productions & Don Juan Entertainment Present Pitbull". 33There was some confusion surrounding the precise communications that led to the Agreement being signed which is unnecessary to describe. It suffices to state that on 13 November 2008 Mr Fernandez sent Mr London an e-mail attaching a copy of the first two pages of the Agreement signed by Mr Fernandez and dated "8/11/08" and that shortly after that Mr London signed his own version of the Agreement (which for some reason he dated 11/11/08). There was no dispute that, at least as at this date, the signed Agreement embodied the terms of the parties' agreement, other than that concerning the Gold Coast concert.
The Agreement 34The Agreement consists of two cover pages, a "Performance Agreement Rider" (the "Performance Rider"), and "Sound Reinforcement Rider" (addressing the technical aspects of the concerts). The relevant parts of the cover pages state: "Agreement made as of November 1, 2008 between the parties identified below. In consideration for the following covenants, conditions, and promises, the Purchaser agrees to hire the Artist to perform an engagement and the Artist agrees to provide such performance services, under the following terms and conditions:
Performance Rider 35The Performance Rider included the following relevant provisions: "PERFORMANCE AGREEMENT RIDER ... 14. AIR TRANSPORTATION. Purchaser shall provide eight (8) round trip, non-restricted airfares [one (1) First-class, seven (7) Coach] on American, Delta, Continental or Major Airlines ONLY. Departure and return to be announced. Artist and staff are to be flown into closest airport to the venue and should be non-stop when available. All flights must be fully refundable and must be approved by Artist management prior to confirmation. If tickets are not electronic (E-tickets), tickets shall be delivered to Artist a minimum of seven (7) days prior to departure date ... ... 22. PROMOTION: Purchaser agrees to promote the scheduled performance(s) on television, radio, newspapers, and other print media, and will use its best efforts to obtain calendar listings, feature articles, interviews of the Artist, reviews of the performance and Artist's records in local, major and alternative newspapers, radio, and television programs. Purchaser shall be responsible for all matters pertaining to the promotion and production of the scheduled engagement, including, but not limited to, venue rentals, security and advertising. Purchaser shall forward clippings, reviews, advertising and poster to Artist. ... 24. CANCELLATION. In the event Purchaser cancels the performance for any reason less than five (5) weeks before the date of such performance, Purchaser will pay artist, as liquidated damages, one half (1/2) of the guaranteed fee agree to be paid for such performance in section 5(a). In the event Purchaser cancels the performance for any reason less than two (2) weeks before the date of such performance, Purchaser will pay Artist, as liquidated damages, the full guaranteed fee agreed to be paid for such performance. ... 26. INSURANCE. Purchaser agrees to obtain any and all necessary personal injury and property damage liability insurance with respect to the activities of Artist on the premises of Purchaser or at such other location where Purchaser directs Artist to perform. Purchaser agrees to indemnify and hold Artist harmless from any and all claims, liabilities, damages and to indemnify and hold Artist harmless from any and all claims, liabilities, damages and expenses for injury, damages, or death to any person, persons, or property, including attorneys' fees, demands, suits, or costs of whatever nature, arising from any action, activity, or omission of Purchaser or third parties, except for claims arising from Artist's wilful misconduct or gross negligence. ..." 36I will return to discuss the terms of the Agreement. However, it should be noted for the purposes of clause 4(c) the "scheduled departure" date was at that time 2 December 2008. It could not be much later if Pitbull and his entourage were to travel from Miami to Perth in time for him to undertake a concert on the evening of Friday, 5 December 2008. Thus, seven days prior to the scheduled departure date was 25 November 2008.
13 November 2008 to 8 December 2008 37Under the Agreement Mr Fernandez was obliged to pay an advance deposit of US$30,000.00 upon its execution. It was common ground that it was not paid then. 38Mr Fernandez and Mr London both gave evidence of a conversation on 13 November 2008 (Miami Time). According to Mr Fernandez, there was a conversation to the following effect: "Mr Fernandez: 'The Australian dollar has dropped to really low levels which in effect would make the Pitbull Australian Tour $30,000.00 more expensive than originally calculated. I will still pay the $20,000 USD as originally offered as per the previous e-mail correspondence. ... I can't afford to fly 2 return business class flights from Los Angeles to Sydney at a cost of $28,000 AUD dollars each.' Mr London: 'I will change the contract to reflect only 1 business class flight instead of 2.' " 39The Agreement only refers to there being one first class flight. In cross examination Mr Fernandez admitted that, given that the Agreement had already been signed by this time, that part of this alleged conversation which concerned changing the number of business class flights does not make sense. 40Mr London agreed that Mr Fernandez mentioned a drop in the Australian dollar, but disputes that they discussed changing the arrangements for airline tickets. He states that they had a conversation to the following effect: "Mr London: 'We won't be taking on any promotion or any duties owed to you until the deposit which should be 50% of the total purchase price is received. I need to receive the deposit or else I am going to accept other offers for performances over these dates. The deposit must be received immediately. The contract states that 50% is due immediately upon execution.' Mr Fernandez: 'You'll get the deposit today.' " 41Mr London was not challenged on this conversation in cross examination although it was taken up with him that he did not protest in writing when he did not receive the funds. Mr Fernandez did not address this conversation in any affidavit. In cross examination, Mr Fernandez accepted that the first sentence was stated by Mr London but denied the remaining sentences. Mr Fernandez agreed that he told Mr London that Mr London would "get the deposit today". 42I do not accept Mr Fernandez's version of this conversation on 13 November 2008. As the Agreement has just been signed, I do not accept that Mr London so meekly accepted a short-payment of the deposit. I accept Mr London's version of that conversation as set out in [40]. Mr Fernandez accepted much of it as being substantially true. With the balance, I consider it likely on the probabilities that Mr London was reminding Mr Fernandez of what the contract required and the alternatives available to Pitbull at that time. Mr London had no established relationship with Mr Fernandez. He had every reason to be wary in dealing with an overseas producer with whom he had never dealt previously. 43On Friday 14 November 2008, Mr Fernandez transferred the sum of US$18,728.67 to Pitbull's bank account. Mr London has annexed to his affidavit a bank document recording receipt of those funds which records a transaction date of 14 November 2008. It is not clear if that records the receipt of cleared funds in Miami on that day. Mr Fernandez stated that in his experience international money transfers take "up to two business days to appear in the recipient's bank account". 44On 14 November 2008, Mr Fernandez sent Mr London promotional material for posting on Pitbull's "fanpage, myspace, facebook, website" etc. 45On 16 November 2008, Mr Fernandez e-mailed Mr London inquiring if he had received the funds that were sent. 46On 17 November 2008, Mr Fernandez sent Mr London an updated international itinerary which included a flight from Los Angeles to Sydney on the evening of 2 December 2008 and a return flight on Thursday, 11 December 2008. He advised that the Gold Coast concert had been booked for Tuesday, 9 December 2008. 47On Tuesday 18 November 2008, Mr London sent Mr Fernandez an e-mail which stated "Got the $$ that you sent. Please give me a call when you get the chance". According to Mr London, he and Mr Fernandez then had a telephone conversation to the following effect: "Mr London: 'Jaime, you haven't sent the full amount of the deposit. We require the full $30,000 deposit or I'm calling the deal off.' Mr Fernandez: 'Don't worry, I'll get the full amount to you soon.' " 48In cross examination, Mr Fernandez denied having this conversation. In his affidavit he stated that on 18 November 2008 they said words to the following effect to each other: "Mr Fernandez: 'Now that you received the money I need Pitbull to do an interview & to send me a video announcing his Australian Tour and shout-outs in audio format to DJ Suave, DJ Don Juan & DJ Nino Brown, and the Melbourne, Sydney and Perth shows ... we arranged to have the front cover of some of Australia's top music magazines and this would greatly benefit our ticket sales and possibly sell out.' ... Mr London: 'I will speak to Pitbull for an interview on the 19th or 20th November 2008 and get the video and audio files sorted and sent soon.' " 49Mr London had no recollection of this conversation. It was not directly put to Mr London that the conversation referred to in [47] did not occur, however he was asked as follows: "Q. Can you provide to the court any explanation why it was at any time after 14 November 2008 you did not put in writing at any stage that the deposit was short of the $30,000 and you were terminating the contract at that time? A. My reasoning for not terminating the contract at that time was, first of all, I pride myself on doing good business. So, that being said, I'm not a mean person, I'm not a person who is just out to take advantage of people or take money from people. So that being said, I wouldn't give up on somebody that is trying to do an event and you've been communicating and he hasn't given me any other indication that it would be wrong for me to do business with him. Q. So you gave Mr Fernandez the benefit of the doubt and you didn't want to do the wrong thing by him and keep the tour going; is that a fair assessment? A. In my words, I was trying to do the right thing and I didn't want to terminate the tour or cancel the tour because of a conversion or because all of the money wasn't there at that time." 50This exchange embodies a recurring theme with Mr London's evidence which in broad terms I accept. He stated that he did not want to terminate the agreement in circumstances that would operate harshly for Mr Fernandez, while at the same time leaving open Pitbull's right to terminate. In a different case and in different circumstances this may have presented a real difficulty for Pitbull in terms of the doctrine of estoppel or election but, as I will explain, that does not arise here. 51I accept that Mr London stated the words he described in [47] above but also that he and Mr Fernandez had a conversation about the promotional material as asserted by Mr Fernandez. In effect Mr London was seeking to maintain Pitbull's right to terminate but progressing the preparation for the tour in case Mr Fernandez provided the necessary funds. At this point Pitbull still had available the next trigger point in the contract, being the requirement for payment seven days prior to Pitbull's scheduled departure date, which by this time was no later than 2 December 2008. 52On 20 November 2008, Mr Fernandez telephoned Mr London seeking the video and audio drops and advising that he needed an interview from Pitbull as soon as possible. 53On 21 November 2008, Mr London sent to Mr Fernandez 'shouts outs' from Pitbull in audio format. They were sound recordings that stated, inter alia: "... Pitt Mr 305 I'm letting all my Australian fans know I will be Down Under. That's right for three days we going to be in, hmm, Melbourne, Perth and Sydney. So all the women out there I'd highly appreciate if y'all knew the rules and regulations - that's no bras and no drawers. Thank you very much. And I'm going to tell you right now we goin' to be getting loose, getting wild, getting crunk, getting nasty but best thing is they going to be getting naked, but after that we going to get crazy [laughs]. And uh this message has been approved by Armando Perez Pitbull ... ... Pitt Mr 305 I'm putting it down right now with DJ Suave in Perth, Australia. That's right, we going to take this thing all the way from the bottom to the land down under, Perth, Australia. Como ... ... Pitt Mr 305 and I'm putting it down with Australia's number one Latin DJ, DJ Don Juan ... ... Pitt Mr 305 putting it down, that's right, with Australia's number one urban DJ, Nino Brown. Are you my brother's keeper? I am your brother's keeper ... ... Pitt and I'll be in Perth Australia, that's right, Mr 305 in Perth, Australia, December, Friday the 5th at Metro City Perth, that's right. And get ready to get crazy ... ... Pitt and I'll be in Melbourne, Australia on Saturday the 6th. That's right December Saturday the 6th at Queensbridge, Melbourne. Get ready to get loose, get wild, get nasty, get crunking, get crazy ... ... Pitt that's right and I'll be putting it down in Sydney, Australia, Sunday, December the 7th at Luna Park, Sydney. Get ready to get wild, get ready to get loose and get ready to get crazy." 54Mr Fernandez states that he contacted Mr London on the same day seeking a video file and pressing for a response about an interview time. Later that day he called Mr London who he said asked him whether an interview could be arranged at 3pm Miami time (6am Sydney/Melbourne time). Mr Fernandez said he made inquiries and rang Mr Purple back advising that it could not be done. He sent Mr London an e-mail saying that he could not organise a journalist at that time. 55On 22 November 2008, Mr Fernandez received a video drop (AVI file) from Pitbull referring to the Pitbull Tour. 56There were further telephone conversations and e-mails between Mr Fernandez and Mr London about potential interview times. 57From this point until 1 December 2008, according to Mr Fernandez, he repeatedly pressed for Pitbull to do an interview and pointed out its importance for ticket sales. He recalls Mr London relaying the requests to Pitbull, but Pitbull not making himself available. 58Mr London did not deny the effect of any of these conversations and I accept that they occurred as stated by Mr Fernandez. However, it was not suggested that Pitbull's failure to make himself available for an interview to promote the tour was a breach of the Agreement. Ultimately, Pitbull did not participate in an interview with an Australian based publication. 59As I have stated, the final payment for the Pitbull Tour was due to be paid by Mr Fernandez seven days prior to the scheduled departure date from the United States, i.e. 25 November 2012. Pitbull was scheduled to depart the United States on 2 December 2008. Mr London prepared Pitbull and his team to travel from Miami at 5.55pm on 2 December 2008. 60However, Mr Fernandez did not make any further payment on or before 25 November 2008. As I will explain, the funds were not sent from Australia until 3 December 2008 (Australian time) and were not received in Miami until 4 December 2008 (local time). 61According to Mr Fernandez, on 30 November 2008 Mr Uribe said to him words to the effect: "I've been having trouble getting the money, but I will definitely have it tomorrow, let Pitbull know and get back to me if there is a problem." 62On 30 November and 1 December 2008, Mr Fernandez and Mr London exchanged a series of e-mails, as follows. (a) At 11.13pm on 30 November 2008, Mr Fernandez e-mailed: "I'm still waiting to hear back from Promoter in East Coast." (b) At 1.26am on 1 December 2008, Mr London e-mailed: "Which promoters are you talking about? The ones in Melbourne and Sydney? We need to figure this out asap! Call me when you get the opportunity so we can discuss!" (c) At 2.01am on 1 December 2008, Mr Fernandez e-mailed: "I will call you as soon as I hear back from the Promoter in Sydney. I understand we need to figure this out ASAP and will call you as soon as I hear anything." (d) At 2.26am on 1 December 2008, Mr London e-mailed: "Just tried to call you. Call me because I need to talk to you." (e) On 1 December 2008, Mr London e-mailed again: "I tried calling you a few times and could not reach you. It is very important that you give me a call immediately. I need to talk to you." (f) At 2.46am on 1 December 2008, Mr Fernandez e-mailed: "I'll call you in 15 min. Sorry I have been in a conference call with Eastern States promoter and other parties all day. Apologies." 63According to Mr Fernandez, on 1 December 2008 he had a conversation with Mr London to the following effect: "Mr Fernandez: 'The Sydney promoter is having trouble getting the money therefore the final payment will be late. I don't want to cancel the Tour and will try to work out a way to get the money to the USA as soon as possible.' Mr London: 'I will wait to hear from you later today with a way to get the money as quickly as possible. I am happy to work out a way and not cancel the Tour ...' ." 64According to Mr London, the conversation was in the following terms: "Mr Fernandez: 'The Sydney promoter is having trouble getting the money to you today, therefore the final payment will be late.' Mr London: 'You didn't tell me that you were waiting on other promoters to make the payment. I have always made it clear that the money has to be in our account before we leave the United States. We are due to leave tomorrow. If we haven't received the money into our account by tomorrow we won't be able to come.' Mr Fernandez: 'I don't want to cancel the Tour and will try to work out a way to get the money to the USA as soon as possible.' " 65It is not clear whether this conversation occurred after the e-mail exchange referred to in [62] or before. The first e-mail reads as though it followed some sort of notification about an inability to pay. On one view there is not much difference between these versions of the conversation. However in terms of the critical conversation on 2 December 2008, which I will come to, the significant differences between them are whether in this conversation Mr London was "happy" and wanted to work out a way not the "cancel the Tour" is significant. On these aspects of the conversation I accept Mr London's version of this conversation. 66In cross examination Mr Fernandez was asked and answered as follows: "Q. In this conversation on 1 December 2008, Mr Purple said that they were due to leave the United States the next day, correct? A. Yes. Q. And he said unless the money was received by the next day, being tomorrow, that they would not come, didn't he? A. Correct." These answers are supportive of Mr London's version of the conversation. 67Further, the e-mails strongly support Mr London's version. The text of his e-mails conveys alarm on his part that, after the due date for payment had arrived, he was told of funding problems and that they were due to problems with other promoters ("which promoters"). I will return to address his knowledge of their existence in dealing with the second issue but, on any view of the correspondence, their position was not at the forefront of their previous discussions. At this time Mr London was dealing with a promoter on the other side of the world with whom he had no previous business relationship. The promoter had just missed the second payment deadline. Once Pitbull and his entourage embarked on the long flight to Australia, his position weakened. There would no longer be any prospect of arranging alternative gigs. Pitbull would incur costs and his band would require payment. His ability to pull out of the concert was significantly limited once he arrived here. Pitbull's reputation would be at risk if he arrived in Australia with tickets having been sold and then refused to perform without being paid. The image of an overseas star holed up in their Sydney hotel refusing to perform until paid represents a public relations disaster. 68Mr Fernandez and Mr London had a further telephone conversation on 1 December 2008 (Miami time) and 2 December 2008 (Perth time). Mr Fernandez was advised by Mr Uribe that there was a difficulty in sending $80,000.00 in one transfer to the USA. According to Mr Fernandez, words to the following effect were spoken: "Mr Fernandez: 'We need 8 people to send $80,000.00 AUD dollars to the USA.' Mr London: 'Call me back in an hour and I will have 8 people to send the outstanding money to.' " 69Mr Fernandez says that there was a further conversation one hour later: "Mr London: 'I am unable to get 8 people in USA to send money to.' Mr Fernandez: 'The safest option is to send the money via international bank transfer and wait 2 business days for it to arrive and move the Perth concert from 5 to 10 December 2008.' Mr London: ' That is the best option.' Mr Fernandez: 'This is not my fault and was out of my control since Western Union had originally told us that they could do it and made us waste a whole day running around for nothing.' Mr London: 'We will not leave the country if the money is not in our bank account.' " 70Mr London denies that he said to Mr Fernandez "call me back in an hour and I will have 8 people to send the outstanding money to". According to Mr London, he told Mr Fernandez that Western Union would not allow him (Mr Fernandez) to send $80,000.00, and for that to occur Mr London would have to find eight people to send the money to. Mr London stated that he did not agree to do that. Mr London also denied that in this conversation Mr Fernandez mentioned moving the Perth concert. He points to some e-mails he received after this conversation referring to flights and accommodation bookings that envisage Pitbull being in Perth for a concert on 5 December 2008. 71I consider it inherently unlikely that Mr London agreed to attempt to find eight people to receive $10,000.00 each or an amount like that on short notice. No doubt Mr London had numerous contacts and was owed favours. However, he would assume a great deal of unnecessary suspicion and scrutiny if he just started telephoning people on short notice to obtain details of their accounts and inquire whether they were willing to receive $10,000.00 from a relatively unknown source overseas. Leaving that aside, the critical part of the conversation was the statement Mr Fernandez attributed to Mr London, namely that "[w]e will not leave the country if the money is not in our bank account". The time to leave was 2 December 2008. I accept Mr London's version of this conversation. 72Mr London states that in the evening of 1 December 2008 (Miami time), he and Pitbull had a conversation to the following effect: "Mr London: 'The Australian promoter still hasn't paid either the remainder of the deposit, or the balance due under the contract. We are supposed to be flying out tomorrow.' Pitbull: 'We can't go in that case. It's too risky. He's an unknown promoter and nothing has felt right about the way he's handled this. We'll have to cancel the tour.' " 73Mr London states that he then phoned every member of the Pitbull Tour and told them that it had been cancelled. 74According to Mr London, in the early hours of 2 December 2008 (Miami time) Mr Fernandez had a conversation in which Mr London said words to the following effect: "Mr London: 'We were due to leave the United States today. You have not paid the money on time as agreed. We are cancelling the tour.' Mr Fernandez: 'I will see if can move the Perth concert from 5 to 10 December 2008, and change the flights so that you can leave later. That will give me more time to get the money from the Sydney promoter and pay you before you leave.' Mr London: 'I will leave that up to you, but you need to confirm all the travel arrangements with me first. If you can change the Perth concert and flights, and find a way to ensure that the payment is received into Pitbull's bank account before we leave the United States, Pitbull might agree to do the Tour, but I can't guarantee it.' " (emphasis added) 75This conversation was not addressed in any of Mr Fernandez's affidavits. In cross examination, Mr Fernandez disputed that Mr London said the first three sentences set out above. However, he agreed that he had said the words Mr London attributed to him. He also agreed that Mr London said the words "I will leave that up to you, but you need to confirm all the travel arrangements with me first". Mr Fernandez disagreed that Mr London said the final sentence set out above. The effect of this evidence was that Mr Fernandez denied the conversation at [74] in so much as it involved Mr London advising him that the tour was cancelled but that Pitbull might reconsider. 76In his submissions, senior counsel for Mr Perez noted that Mr London was not challenged about the conversation on 2 December 2008 set out in [74] above, and pointed out (correctly) that in cross examination Mr London repeatedly emphasised that he cancelled the Pitbull Tour on the evening of 1 December 2008 or in the early hours of 2 December 2008 (Miami time). As the conflict over this conversation is critical, I will defer resolving it until I have outlined the evidence concerning the remainder of the relevant events. 77One day later, in the early hours of the morning of 3 December 2008 (Miami time), Mr London agreed to a request from Mr Fernandez to update Pitbull's website to reflect the change of date for the Perth show. 78On 3 December 2008, a transfer of US$50,975.00 was sent from Australia via international money transfer to Pitbull's account. As previously stated by Mr Fernandez, it can take up to two days for such a transfer to appear in a recipient's account. 79Just before the close of business on 3 December 2008 Mr London telephoned Mr Zelada and inquired whether the funds had been received. 80Sometime late in the evening of 3 December 2008, Mr London logged onto the American Airlines website to confirm the booking details for the flight that Mr Fernandez's e-mails indicated had been reserved for the Pitbull team to leave Miami at 3:20pm on 4 December 2008. The website did not record any booking for the flights. 81On 4 December 2008 at 12:01am (Miami time), Mr Fernandez sent Mr London an e-mail which stated "Did the bank transfer go through?". 82On 4 December 2008 at 3:32am (Miami time), Mr London sent an e-mail in reply which stated "No it did not come in yet. Call me when you get a min, please". 83According to Mr London, at around 4am on 4 December 2008 (Miami time) he had a conversation with Mr Fernandez to the following effect: "Mr London: 'I checked our account yesterday afternoon, and the money still hasn't come in. I also checked the American Airlines website, and there are no flights booked for us to leave Miami tomorrow. Some of the other flights in Australia also haven't been booked yet. We wouldn't be able to leave tomorrow.' Mr Fernandez: 'I don't know what happened with those flights. I am going to check them.' Mr London: 'You can do what you like, but the tour is still cancelled. We won't be going anywhere tomorrow.' " 84 Mr Fernandez did not address this conversation in his affidavits. In cross examination he agreed that Mr London said the first sentence ("money still hasn't come in"), but denied he said the second ("checked the American Airlines website"). He did not deny that he mentioned the flights in Australia, but insisted they had been booked. He denied Mr London said they "wouldn't be able to leave tomorrow" or that the "tour was still cancelled" and "they wouldn't be going anywhere". 85On 4 December 2008 at 7:12am (Miami time), Mr Fernandez sent Mr London an e-mail saying "can you please let me know Thursday morning if the money has come through". 86On 4 December 2008 at 8:35am (Miami time), Mr Fernandez sent Mr London an e-mail stating: "I seriously do not know what the [xxxx] the problem is with American Airlines. I called them not long ago ... to find out what was happening with the flights from Miami to Los Angeles as you mentioned that they were coming up as cancelled ... and to my surprise they had in fact been cancelled. Apparently there was a glitch in the system and the flights were cancelled. ... Anyways I had to make a choice as all the flights were booked on the 3:20 PM from Miami. I tried to call you but you're obviously still asleep. They wanted to put u on a later flight but that arrived at 9 PM in Los Angeles and if there were delays it would make you lose your flight to Sydney. So what to do, what do to? The only other reasonable option was to put u on the same flight but on coach so you can all travel together. Or put you on First-class on an earlier flight which meant you would have to catch the 8:30 AM flight from Miami to Los Angeles and taking into account that its already 7:30 AM in Miami that was definitely a bad idea. So the only option I had was to put you on Coach on that flight. This was the only real option. I asked to speak to the Manager to try to find a solution to the problem but the First-class on that flight was fully booked. So I managed to get you the best Coach seat possible with the extra legroom. I hope you do not think that this was caused by me intentionally or that I did not book the flights. ... I am confident the money will be in your account today." 87On 4 December 2008 at about 11am, Mr London woke up and reviewed his e-mails. He saw the e-mail sent at 8.35am (Miami time). Mr London states that he considered that Pitbull would be unlikely to agree to travel in economy class and that it was too late to prepare, check that everything was in order for the rest of the Pitbull Tour and get to the airport in time. 88Mr London called Mr Zelada, who told him that the deposit from Australia was received overnight. 89Mr London then had a telephone conversation with Pitbull to the following effect: "Mr London: 'The money from Fernandez has come in overnight, and he now says that he has booked economy flights which leave Miami this afternoon. However, I would have to confirm that these flights have actually been booked because last time there were problems and the flights hadn't been booked at all.' Pitbull: 'I am not happy to travel in economy class. What about the other hotel and travel arrangements?' Mr London: 'There are still some other travel arrangements that need to be sorted out because of the change in the itinerary. I don't know if Fernandez has organised these yet.' Pitbull: 'There won't be enough time for you to confirm all the flight details, and for all the team to get ready and get to the airport on time. We won't make it. We couldn't leave today.' Mr London: 'What do you want to do about this Australian tour? Everything has gone wrong from the beginning. Fernandez didn't pay the full deposit, and never told me that he wasn't going to be able to pay on time, even though I made it very clear that we have to be paid before we leave the United States. He's already had to change the concerts once. I have told him it's cancelled but he still wants it to go ahead.' Pitbull: 'We can't afford to have the concerts postponed again. Fernandez has breached the agreement. Tell him that the tour is still off. Give him his money back, less the deposit, just as an act of good will.' " 90On 4 December 2008 at 12:21pm (Miami time) Mr Fernandez sent an e-mail to Mr London which said: "I need to know if you have received the money in the bank account. Over 3000 people are going to be very disappointed and pissed off if you guys don't show up down under. Plus that's not taking into the huge financial loss to everyone involved in getting you guys over here. Can you please call me either way. I've done everything I could to make this tour happen and I hope you have seen that I have been honest and sincere with you at all times. Please let me know ASAP what the plan is." 91On 4 December 2008, in the early afternoon (Miami time) and 5 December 2008 (Perth time), Mr London and Mr Fernandez had a telephone conversation. According to Mr Fernandez, they said words to the following effect: "Mr Fernandez: 'Is the money in the account?' Mr London: 'It is but will not be boarding the flight because something doesn't feel right. I will be refunding all the money that was sent because Pitbull does not want to keep your money.' " 92According to Mr Fernandez, later in the conversation Mr London said "We will be keeping half". 93According to Mr London, he confirmed that the money had been received and that Pitbull would refund the money less the deposit of US$30,000.00. Mr London otherwise disagrees with Mr Fernandez's recollection and says that they said words to the following effect: "Mr Fernandez: 'Is the money in the account?' Me: 'It is. But we received it too late. The flights you booked were not acceptable. Mr Perez never travels in economy, and it was too late to get everybody to the airport anyway.' Mr Fernandez: 'What are we going to do? A lot of people are going to be pissed off if you guys don't come.' Me: 'This tour has never felt right. As I said before, the tour is off.' "
Did Mr London cancel the tour on 2 December 2008? 94In contractual terms Mr London's version of events involves him terminating the Agreement on 2 December 2008 when Pitbull was due to leave but the required payments had not arrived ("at this point the tour is cancelled"). On his version he nevertheless left open the possibility of a further agreement being reached to allow a revised tour to proceed provided that the funds had been received and their concerns were satisfied ("If you can figure out a way to make it happen then maybe Mr Perez will change his mind and decide to do it"). Mr Fernandez's version involves Mr London holding off termination and agreeing to revise the dates. 95I have not resolved the dispute between Mr London and Mr Fernandez by concluding that either of them was not a witness of truth. I have no doubt that both were doing their best to honestly provide their recollection of what occurred, although their recollections are no doubt affected by the passage of time. There is also the natural human tendency to recall such events through the prism of self justification in the context of a deal that had shown promise but soured dramatically. However, having heard their evidence and considered it in its context, I accept Mr London's version of the conversations on 2 December 2008 and 4 December 2008. 96The position Mr London and Pitbull were in during this period was as follows. By 2 December 2008 Mr London had not received the total of the first payment that had been due under the Agreement on 13 November 2008 (although I note that it is the plaintiffs' case that the Agreement had been varied in this respect). He had not received the second and final payment that was due on 25 November 2008. He was dealing with an overseas promoter with whom he did not have any established relationship. As I have said, once Pitbull embarked on his flight to Australia his exposure increased and his ability to pull out became difficult. It is common ground that on 1 December 2008 Mr London had said they would not leave unless they were paid. However, unless they left on 2 December 2008, the tour Pitbull had contracted to perform, namely one commencing in Perth on the evening of Friday, 5 December 2008 local time, could not occur. The departure date of 2 December 2008 was pivotal to Pitbull completing this tour. Once it came unstuck, Pitbull's opportunity to undertake that tour was over. It would have been extremely risky for Mr London to have left Pitbull committed to embarking on a plane for a revised set of dates after yet more promises to make payments had not been fulfilled. I consider it unlikely he took that risk. In my view Mr London was canny enough to make it clear that the Agreement was over and Pitbull was not bound to come to Australia. At best, Pitbull might reconsider coming if the money was in and their concerns about what must have appeared to be a poorly resourced promoter were satisfied. However, Mr London made sure that was a matter for Pitbull's choice and he was no longer obliged to come. 97A powerful submission to the contrary of this finding was made by counsel for the plaintiffs, Mr Baran. He pointed to the complete absence of any documentary material, especially a text or e-mail, following the conversation of 2 December 2008 supporting Mr London's version that he advised Mr Fernandez in the conversation on that day that the tour was cancelled. He pointed to the updated tour dates that were posted to Pitbull's facebook account and the absence of corroborating evidence from Pitbull or the other performers that they were notified just before or soon after the 2 December 2008 conversation that the tour was cancelled. 98The absence of any reference to the tour being cancelled in any text or e-mail sent between 2 and 4 December 20008 has given me considerable reason to pause before I accept Mr London's evidence concerning the terms of that conversation. The position outlined by Mr London during the meeting on 2 December 2008 was contractually nuanced, i.e. termination of the Agreement together with an intimation that Pitbull might reconsider if Mr Fernandez could demonstrate some bona fides. One might expect that would have been spelled out in writing immediately following the meeting. However I am mindful not to translate the approach that might be taken by commercial or litigation lawyers when assessing the contents of written communications between Mr London and Mr Fernandez. Mr London's background and experience was in managing and arranging gigs then tours for performing artists. His commercial experience was forged in that environment not in the legal manoeuvres that surround souring deals turning litigious. My reading of the e-mail communications between him and Mr Fernandez does not reveal that either of them was seeking to establish a record of what they discussed for external scrutiny at some later time. The e-mails following their conversations did not purport to recite the substance or effect of what they just discussed. 99The posting of the updated tour dates on Pitbull's website is equivocal. On the findings I have made it is still likely that after the conversation on 2 December 2008, Mr London was hopeful that the tour might go ahead, but he wanted Pitbull free of any legal obligation to do so. The posting of updated dates on Pitbull's website is equally consistent with both Mr London not having advised that the tour was cancelled or his having done so, but left open the possibility of Pitbull agreeing to a further deal. 100I give no weight to the absence of any other witness from the defendant's camp giving evidence to the effect that Mr London advised them on 2 December 2008 that the tour was cancelled or later in the day of the effect of his conversation with Mr Fernandez. Evidence to that effect might have been admissible under s 64(2) of the Evidence Act 2005. However, prior to the hearing Mr Fernandez had not provided any affidavit responding to, much less denying, Mr London's version of the conversation on 2 December 2008. His denials of part of that conversation only emerged during cross examination. In those circumstances, even if all the other preconditions to a Jones v Dunkel [1959] HCA 8; 101 CLR 298 inference were otherwise made out, I would not have expected the defendant to produce affidavits or extra witnesses from Miami during the course of the hearing.
Retention of the deposit and refund of the remainder 101On 4 December 2008 at 3pm (Miami time), Mr London received an e-mail from Mr Fernandez which attached his bank account details. 102On 5 December 2008, Mr London sent Pitbull an e-mail which stated: "Here is the account info for Australia. Send back $39,700. Let me know when you send it back. Also, the pay out amount for payrol [sic] is on 30,000." 103The reference to "the pay out amount for payrol is on 30,000" was a reference to amounts to be paid to Pitbull's staff, being Mr London, other managers and accompanying musicians. 104On 8 December 2009, Pitbull transferred the sum of USD$39,700.00 to Mr Fernandez's account.
Issue (1): Did Pitbull validly terminate the Agreement? 105Mr Perez contends that the Agreement was validly terminated by Mr London on his behalf in the early hours of 2 December 2008 in the conversation that I have extracted in [74] above. He claims that he was entitled to do so under clause 7 of the Agreement by reason of the non-payment of the full amount of the deposit at or around the time stipulated (i.e. execution), the non-payment of the balance of the amount owing seven days prior to his scheduled departure (25 November 2008) or both. The contention that the Agreement was validly terminated on 2 December 2008 was not expressly pleaded in Pitbull's defence, but it is encompassed by paragraph 11 of his cross claim. In any event, no pleading point was taken by the plaintiffs concerning this. Mr Perez also contends that, even if he did not terminate on 2 December 2008, he terminated on 4 December 2008 and was entitled to do so for the same reasons and, in addition, because Mr Fernandez's failure to arrange air transportation was also said to justify termination under the Agreement. 106The plaintiffs submit that as a matter of fact Mr London did not purport to terminate the Agreement on 2 December 2008. They contend that, as a matter of construction of the Agreement, it did not authorise the termination on 4 December 2008 being a time after he had received the amounts payable by reason of any failure to either the initial deposit or the balance on their due dates. They further contend that, in any event, the time for payment of the amounts due under the Agreement had been varied. They deny that there was any failure to arrange appropriate air transportation or that, if there was, it justified termination.
Termination on 2 December 2008 107The starting (and potentially ending) point is my acceptance of Mr London's evidence that on 2 December 2008 (Miami time) he told Mr Fernandez that "We are cancelling the tour" (see [74] above). The Agreement did not specify any form of notice or method for communicating a termination in accordance with sub-clause 7(c). In my view those words, if said, were a sufficiently clear communication of Pitbull's termination of the Agreement even though Mr London held out the possibility or probability of a revised tour if the money was received (see Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749). The plaintiffs did not contend otherwise, although they dispute the fact that the words were spoken and did not accept that a right to terminate had arisen because they contend that the Agreement had been varied. 108Clause 7(c) of the Agreement provided that "If [Pitbull] has not received the deposit in the amount and at the time specified in subsection 4(b, c) then [Pitbull] thereafter at any time shall have the option to terminate this Agreement". Only the payment due at the time of execution of the Agreement had the formal label "deposit". It is described as "Advance/ Deposit" in sub-clause 4(b). Nevertheless, the reference to "clause 4(b, c)" in clause 7(c) makes it clear that a failure to make either of the payments referred to in sub-clause 4(b) or 4(c) on the dates specified is sufficient to give rise to the right to terminate. As at 2 December 2008 Mr Fernandez had not paid the full instalment of $30,000.00 due on execution of the Agreement and had not paid the second instalment of $30,000.00 seven days prior to scheduled departure (25 November 2008). Subject to considering the plaintiffs' argument as to variation, in my view it must follow that the right to terminate under clause 7(c) had clearly arisen, was still subsisting and was validly exercised on 2 December 2008.
First limb of pleaded variation 109Paragraph 16 of the Third Amended Statement of Claim pleads that Mr Fernandez and Mr London agreed orally and in writing to vary clauses 4(a) to (c) of the Agreement by firstly, only requiring the payment of an initial deposit of $18,753.67 and secondly, deferring the date for the payment of the balance to 3 (or 4) December 2008 with revised tour dates to accommodate a later departure time. Although these variations are pleaded as being agreed orally and in writing, the plaintiffs' submissions also sought to rely on inferences from the conduct of the parties. Further the submissions in support of the variation appear to be directed towards defeating a termination effected on 4 December 2008 after the money was received in the USA and not a termination effected on 2 December 2008 as I have found. Nevertheless I will address the plaintiffs' submissions in the context of the findings that I have made concerning the discussion on 2 December 2008. 110In relation to the first component of this alleged variation (i.e. reduced amount of initial deposit), no conversation concerning any such variation was deposed to in any of Mr Fernandez's affidavits. Instead it emerged in cross examination in the following manner: "Q. Mr Purple never said to you that you didn't need to comply with the obligation to pay $US30,000 upon execution of the contract, did he? A. Yeah, he did say that we had to pay the rest of the money in the final payment, what was missing. Q. He never said that to you? A. We did have a conversation over the phone. Q. Where have you referred in your two affidavits to Mr Purple saying you can pay the balance in the final payment or the wash up? A. I didn't put it in the affidavit. It's not in the affidavit. ... Q. When do you say Mr Purple said, "It's okay that you don't pay $US30,000 and you can pay the balance later or in the wash up"? A. It would have been around 11 or 12 November. We had a conversation over the phone. ... Q. There is no email from you saying to Mr Purple, confirming that "it's okay that we don't pay $US30,000 now, that you have agreed we can pay 20,000"? A. There is no email, no. Q. There is no email from him to you to say "it's okay, you can pay 20,000 now and we won't worry about the 10,000 now", is there? A. No." (emphasis added) 111Accepting the inadequate means from their perspective as to how this evidence was adduced, the plaintiffs submit that a conversation of the kind described by Mr Fernandez must have occurred "as a matter of rational inference". They point to the conduct of Mr London in not terminating the Agreement after the short payment of the deposit but instead pursuing the Agreement by arranging for the provision of audio and visual drops and seeking to arrange media interviews (albeit with no success). They submit that the variation is self evident from his conduct "in continuing to keep the tour on foot despite non-compliance with the payment of the deposit and there being no termination" and that an agreement as to variation is the "only inference that can be drawn from the conduct of the parties as at the date of the payment of $18, 753.67". 112I do not accept these contentions. To the extent they rely on the evidence of Mr Fernandez extracted above I do not accept that any such conversation occurred. Given its fundamental significance to the plaintiffs' case, I would have expected it to have been included in one of Mr Fernandez's affidavits if he had recalled it at the time those affidavits were prepared. He only referred to such a conversation when prompted by the cross examiner and I regard his answer as reflective of my description in [95] but not as satisfactory evidence of a conversation that occurred at the time alleged. No conversation to this effect was put to Mr London in cross examination. 113Further, Mr Fernandez identified the date of this conversation as 11 to 12 November 2008. However, on 13 November 2008 he sent Mr London an email attaching the Agreement signed by him with no annotation of the deposit clause, and it was that version which Mr London signed. Thus the executed Agreement post-dated the conversation alleged by Mr Fernandez and thereby superseded it (see Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; 218 CLR 471 at [35]-[36]). 114Otherwise I do not accept that any aspect of Mr London's conduct supports the case that there was a contractual variation. The plaintiffs did not put any case of election or estoppel (or any other doctrine that could carry the label "waiver" other than variation: see Agricultural & Rural Finance Pty Ltd v Gardiner [2008] HCA 57; 238 CLR 570 at [51] to [55]). Sub-clause 7(c) conferred upon Pitbull an "option" to terminate the Agreement for non-payment at the times specified "thereafter at anytime". This clause specifically contemplates Pitbull not immediately terminating the Agreement for non-payment at the specified time but, subject to any election or estoppels preventing it, enables to him to terminate at later point with the Agreement having continued in the interim. In those circumstances I do not see how the failure of Pitbull via Mr London to immediately exercise that option but instead choosing to act as though the Agreement was still on foot evidences an agreement to vary the contract. In this respect nothing in Pitbull or Mr London's conduct was at variance or inconsistent with the Agreement. 115Pitbull also submitted that this aspect of the case on variation failed because there was no consideration for the variation (see GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50; 128 FCR 1 at [218] per Finn J). In his opening, counsel for the plaintiffs referred to the consideration of the additional sum to be paid for the concert on the Gold Coast. I have described the evidence concerning that at [27] above. The relevant discussions pre-date the Agreement and it was otherwise an entirely separate matter. The plaintiffs' written submissions contend that the consideration that flowed from "that variation" (i.e. the first component) was "the receipt of the drops and the continuing publication and promotion to the extent that the first and second plaintiffs could of the Pitbull tour". The only consideration arguably flowing from Mr Fernandez (see Pico Holdings Inc v Wave Vistas Pty Ltd [2005] HCA 13; 79 ALJR 825 at [66]) as revealed by this submission is his conduct in publicising and promoting the tour. However, Mr Fernandez was obliged to undertake to take those steps pursuant to clause 22 of the Performance Rider (see [35] above). His performance of his existing obligations to Pitbull was not consideration for the variation (see TA Sundell & Sons Pty Ltd v Emm Yannoulatos (Overseas) Pty Ltd (1955) 56 SR (NSW) 323). For this additional reason this first aspect of the variation is not made out.
Second limb of pleaded variation 116Even if I had accepted that the first part of the variation pleaded in paragraph 16 of the Third Amended Statement of Claim was made out, by itself it would not assist the plaintiffs. If made out, it only operated to extend the time for payment of the deposit until the due date for payment of the second instalment, namely 25 November 2008 being seven days prior to the departure date. The plaintiffs did not make the required payments by that time and they were still outstanding on 2 December 2008. Hence the plaintiffs are driven to rely on the second limb to extend the time for payment until 3 or 4 December 2008. 117The submissions in support of this variation point to the conversations that Mr Fernandez states he had with Mr London and the conduct of Mr London in updating Pitbull's internet and myspace web pages with the revised concert dates. The plaintiffs' submissions are all premised upon a rejection of Mr London's evidence concerning these conversations and an acceptance of Mr Fernandez's evidence. For the reasons I have given, I accept Mr London's evidence. However, even if I had accepted Mr Fernandez's version of these conversations (see [68], [69], [75], [84] and [91] above), I cannot discern any express agreement between them to vary the tour dates and accept a later date for payment. At best they involve Mr Fernandez scrambling to comply with his outstanding obligations but not him negotiating a new or varied tour agreement. Further, I cannot infer any such agreement from the combination of those conversations, the exchange of e-mails, Mr Fernandez's conduct in forwarding the money and seeking to arrange air tickets and Mr London's agreement to update the website with the new tour dates. They are equally consistent with Mr London keeping Pitbull's options open under the existing Agreement. Whether they could give rise to an election or estoppel is a different matter but no such contention was pleaded or argued.
Termination on 4 December 2008 118As I have stated Pitbull's alternative case was that, if the Agreement was not terminated on 2 December 2008, it was validly terminated on 4 December 2008 (Miami time) during the conversation referred to in [93] above. The right to terminate was said to have arisen by reason of the failure to pay either of the instalments on time and to arrange air tickets notwithstanding that payment had finally been received by that time. I do not propose to embark upon any detailed consideration of this contention because to consider it would require me to reconsider the entirety of the factual issues that I have already resolved and would probably yield four or five different factual scenarios. It is only necessary to note three points. 119First, during oral submissions the plaintiffs submitted that, as a matter of construction, clause 7 did not entitle Pitbull to terminate the Agreement for a failure to pay by the dates specified in sub-clause 4(b) or 4(c) if the funds had been received between those dates and the purported termination. It was contended that it would be absurd and capricious if the "Artist" could terminate the Agreement say just prior to the first performance because the first instalment had been paid say a day late some weeks previous. If an agreement is ambiguous the Court should prefer a construction which avoids capricious, unreasonable or unjust outcomes (Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; 129 CLR 99, at 109 per Gibbs J). However there is no ambiguity in clause 7 in this respect. It enables termination "thereafter at anytime". The scenario of the "Artist" terminating just prior to the concert because of a day's delay in payment some weeks previous would appear to be one that would invoke the doctrines of election or estoppel (even if no variation to the agreement could be demonstrated). The plaintiffs did not rely on those doctrines in this case. 120Second, the next basis the plaintiffs put forward for defeating this aspect of Pitbull's case was the alleged variation which I have already addressed. At [117] above I rejected the second limb of that contention even on a factual scenario that involved accepting Mr Fernandez's evidence as to the events between 1 and 4 December 2008. This reasoning is equally applicable to defeat the plaintiffs' response to Pitbull's reliance on a termination having been effected on 4 December 2008. 121Third, in addition to the non payment of the amounts stipulated by clauses 4(b) and 4(c) of the Agreement as a basis for termination on 4 December 2008 Pitbull relied on an alleged failure on the part of Mr Fernandez to arrange for the appropriate air transportation as provided for in clause 26 of the Performance Rider (see [35]). If the air line tickets were not "e-tickets", clause 14 required that they be delivered to the "Artist" seven days prior to the departure date. Otherwise clause 14 was silent as to when the purchaser "shall provide airfares" although obviously they had to be booked prior the embarkation time. Much of Pitbull's submissions on this topic appeared to assume that clause 14 provided some definite cut off point prior to embarkation at which e-tickets of the requisite class had to be definitely available. It does not. In an age where airline tickets can be booked and changed instantaneously online, the Agreement provides considerable scope for the "purchaser" referred to in clause 14 to book last minute flights and obtain management approval. Pitbull also contended that an implied term of the Agreement had the same effect. I do not accept that contention for the same reason. 122In any event, I have found that Mr London terminated the Agreement on behalf of Pitbull in the early hours of 2 December 2008 (Miami time). As at that time the scheduled time for departure was 5.55pm. As at the time of the cancellation Mr Fernandez had not yet breached clause 14 of the Performance Rider, and there was no basis for concluding there was any anticipatory breach either. Even if the bookings had not been made for flights on that day there was still time available to make bookings.
Issue (2): Whether Mr Uribe was third party beneficiary to the Agreement? 123In light of my conclusion in relation to issue (1), it is strictly not necessary for the outcome of the proceedings to determine issue (2). However, in deference to the parties' careful arguments and, as it may be of assistance if the matter proceeds on appeal, I will address the second issue. 124As I have stated, the Agreement is governed by the law of Florida. The contract law of Florida contemplates that, in limited circumstances, a third party to a contract may enforce rights as a third party beneficiary. One formulation of the principle was stated by the Fourth District Court of Appeal of Florida in Caretta Trucking, Inc v Cheoy Lee Shipyards, Ltd 647 So 2d 1028 (1994) at 1031 as involving: "(1) a contract between A and B; (2) an intent, either expressed by the parties, or in the provisions of the contract, that the contract primarily and directly benefit C, the third party (or a class of persons to which that party belongs); (3) breach of that contract by either A or B (or both); and (4) damages to C resulting from the breach." 125The parties dispute the scope of the second aspect of this statement. The plaintiffs contend that the intention to benefit a third party can be ascertained from a consideration of material extrinsic to the contract, whereas Pitbull contends that the written contract must clearly express an intent to benefit a third party or a class of persons to which that third party belongs. He submits that negotiations and dealings between the parties cannot modify the written contract to create an intent to benefit a third party, when there was no such intent in the original written contract. In the event that the plaintiffs' contention as to Florida law is accepted, a further question arises is as to whether they have established such an intention in respect of Mr Uribe. If Pitbull's contention is accepted, then the plaintiffs did not contend that the Agreement manifested the relevant intention. 126The parties prepared but did not read affidavits from experts concerning the content of Florida law. Instead they tendered the various decisions they relied on (see s 175 of the Evidence Act). They also supplied a note explaining the judicial hierarchy of the relevant courts exercising judicial power in Florida. In summary at trial level the state system is comprised of county courts of limited jurisdiction similar to our Local Courts, and of Circuit Courts which are courts of general jurisdiction similar to the trial levels of our Supreme and District Courts. Appeals from County Courts are heard by Circuit Courts. Appeals from Circuit Courts are usually heard by one of a number of District Courts of Appeal. At the apex of the state hierarchy is the Florida Supreme Court which hears appeals in some limited category of cases direct from the Circuit Courts and otherwise from the District Courts of Appeal. Sitting alongside these courts are the Federal Courts. Appeals from decisions at trial level are heard by the 11th Circuit Court of Appeal. 127Pitbull relies on a series of cases emphasising the importance of the terms of the parties written contract. In particular he points to the following passages from the decision of the 4th District Court of Appeal in Jenne v Church & Tower, Inc 814 So 2d 522 (Fla 4th DCA 2002) ("Jenne"): "Florida law looks to 'nature or terms of a contract' to find the parties' clear or manifest intent that it 'be for the benefit of a third party'." "[T]he language used in a contract is the best evidence of the intent and meaning of the parties." ... "[T]here must ... be a clear intention in the contract between [the contracting parties] to directly and substantially benefit [the third-party], in order for [the third-party] to sue on the third-party beneficiary theory." [citations omitted] 128The court in Jenne referred to the evidence about previous negotiations and stated: "These factors do not confer third-party beneficiary status on the [third party] in this case. Negotiations and dealings between the parties cannot modify a written contract to create the parties' 'intent' when the lack of such intent is evident from the contract." 129Pitbull noted that Jenne had been cited by the 3rd District Court of Appeal in 2006 (Biscayne Investment Group, Ltd v Guarantee Management Services, Inc 903 So 2d 251 (2006); Networkip, LLC v Spread Enterprises, Inc 922 So 2d 355 (2006) at 358, and in 2008 (Health Options, Inc v Palmetto Pathology Services 983 So 2d 608 (2008). Jenne was also applied by the Florida Supreme Court in Foundation Health v Westside EKG Associates 944 So 2d 188 (2006) at [8]). However the citation of Jenne in Foundation Health referred to the need for a "'clear or manifest intent' to 'primarily and directly benefit' the provider". This formulation does not preclude a consideration of either the pre or post-contractual communications between the parties as a means of ascertaining their intention on this issue. 130However, other decisions support Pitbull's contention. In City of Tampa v Thornton-Tomasetti, P.C. (646 So 2d 279 (1994)), the 2nd District Court of Appeal stated at p 282 that: "[t]he intention of the contracting parties, gleaned from the contract itself, is determinative ...". Similarly in Morgan Stanley DW Inc v Halliday (873 So.2d 400 (2004)), the 4th District Court of Appeal stated at p 403 that: "A non-party is the specifically intended beneficiary only if the contract clearly expresses an intent to primarily and directly benefit the third party or a class of persons to which that party belongs". Pitbull relied on statements to similar effect in Biscayne and Florida Power & Light Company v Road Rock, Inc 920 So 2d 201 (2006). 131The plaintiffs relied upon a number of decisions which included statements to the effect that pre and post-contractual dealings may be taken into account, including Florida Power & Light Company v Mid-Valley, Inc 763 F 2d 1316 (1985) ("Mid-Valley"), Caretta and Goodell v K.T. Enterprises, Ltd 394 So 2d 1087 (1981). I will deal with those cases shortly. At the outset, however, I note that the most recent of those decisions was that of Altonaga J of the Federal District Court for the Southern District of Florida Miami Division dated 6 June 2011 in Belik v Carlson Travel Group, Inc US Dist Lexis 60337 (2011). Not only does the opinion of Altonaga J have the advantage of recency it also reconciles a number of the decisions relied upon by both parties. In Belik, Altonaga J dismissed an application for summary judgment one part of which was directed to defeating a claim by the plaintiff that he was the third party beneficiary of a contract. Her Honour stated (at p 8): "To properly plead a claim for breach of a third-party beneficiary contract, a plaintiff must allege: (1) The existence of a contract in which plaintiff is not a party, (2) an intent, either expressed by the parties, or in the provisions of the contract, that the contract, primarily and directly benefit the plaintiff, (3) breach of that contract by one of the parties and (4) damages to plaintiff resulting from the breach. Rinker v Carnival Copr., 753 F. Supp. 2d 1237, 1243-44 (S.D. Fla. 2010) (citation omitted). "A third party must establish that the contract either expressly creates rights for them as a third party or that the provisions of the contract primarily and directly benefit the third party or a class of persons of which the third party is a member." Greenacre Props., Inc. v. Rao, 933 So. 2d 19, 23 (Fla. 2d DCA 2006). The third parties do not need to be specifically mentioned by name so "long as the contract refers to a 'well defined class of readily identifiable persons' that it intends to benefit." Polo. Ralph Lauren, L.P. v. Tropical Shipping & Const. Co., 215 F.3d 1217, 1222 (11th Cir. 2000) [24] (quoting Generali v. D'Amico, 766 F.2d 485, 490 (11th Cir. 1985)). The party's status as a third-party beneficiary "may be established by pre-contract and post-contract actions of the parties." Fla. Power & Light Co. v. Mid-Valley, Inc., 763 F.2d 1316, 1321 (11th Cir. 1985) (citing Goodell v. K.T. Enterprises., Ltd., 394 So. 2d 1087 (Fla. 1st DCA 1981)). Both contracting parties must intend to benefit third parties; it is insufficient if only one party unilaterally intends to benefit some third party. See Fla. Power & Light Co. v. Road Rock, Inc., 920 So. 2d 201, 203 (Fla. 4th DCA 2006) (quoting Caretta Trucking, 647 So. 2d at 1031)." 132In reciting the elements of a third party beneficiary claim her Honour relied on the decision in Rinker, which was not tendered before me. However the formulation of the principle that is set out is consistent with Caretta (which her Honour later cites). Her Honour also cites Mid-Valley and Goodell as authority for the proposition that pre and post-contractual conduct can be used to ascertain a party's status as an intended third party beneficiary. However, this is subject to the caveats that precede it, namely that there must be first ascertained from the contract itself the intention to create rights for, or benefit, third parties who are either named or of a particular class. It is only if that step is overcome then recourse can be had to extra-contractual communications to establish that the particular plaintiff is one of those intended beneficiaries. 133This analysis is supported by the following statements from the United States Court of Appeals, Eleventh Circuit in Bochese v Town of Ponce Inlet 405 F 3d 964 (11th Cir 2005) at p982-983: "The contracting parties' intent to benefit the third party must be specific and must be clearly expressed in the contract in order to endow the third party beneficiary with a legally enforceable right. See e.g. Am Sur Co 130 So. At 441 ('Where, therefore, it is manifest from the nature or terms of a contract that the formal parties thereto intended its provisions to be for the benefit of a third party, as well as for the benefit of the formal parties themselves, the benefit to such third party being the direct and primary object of the contract, or amongst such objects, such third party may maintain an action on the contract even though he be a stranger to the consideration." ... "In the absence of any specific mention of Mr Bochese in the contract, it would be extraordinarily difficult for him to establish that under Florida law he was an intended beneficiary, since "[a]n intent to benefit a third party which must be inferred from contradicted circumstantial evidence cannot be characterised as 'apparent', 'direct', or 'primary'." Hewko v Genovese, 739 So 2d 1189, 1192 (Fla 4th DCA 1999). In this case there is simply no evidence-textual, circumstantial, extrinsic, or otherwise that even one of the contract parties (let alone both PLP1 and the Town) intended to confer a benefit on Mr Bochese." 134The first part of this quote makes it clear that the consideration of the contract is for the purpose of ascertaining whether either the plaintiff or a class to which he belongs is an intended beneficiary. This can be ascertained from either "the nature or terms of the contract". If, after answering that inquiry, it is necessary to determine whether the particular plaintiff is such a party then extrinsic evidence can be considered, although in that case it would be "extraordinarily difficult". 135I find Altonaga J's analysis in Belik compelling. I adopt it. Both sets of submissions asserted that there were competing strands of authority in both the Florida state and federal courts concerning this point, and sought my determination on which one was errant. This was puzzling because if there were such significant differences in opinion I would expect to see that recognised by the various authorities. Instead my reading of the judgments reveals that, while the precise formulations of the relevant principles may have differed and the outcome of the cases were not completely reconcilable, none of the judgments revealed or even hinted at any recognition that there was a significant underlying difference in approach. Belik confirms that there are no such differences. 136As the conclusion that I have come to is closer to Pitbull's contention, it is appropriate that I address the decisions relied on by the plaintiffs. The first is Caretta itself. Caretta upheld a summary dismissal on the basis that the facts averred did not satisfy the second element set out in the passage that I have extracted in [124] above (Caretta at 1031 to 1033). The judgment in Caretta refers to Mid-Valley and Warren in the context of pre and post-contractual communications but there is nothing that affects the above analysis. 137Next is Goodell. Goodell purchased a conveyor belt system from K.T. Enterprises. In pre-contractual negotiations, the sale was intended to be directly with Better Baked. K.T. Enterprises admitted knowing that the system was for the purpose of Better Baked's business. Importantly, the purchase agreement expressly provided that K.T. Enterprises would ship the unit to Better Baked and install it. The 1st District Court of Appeal stated: "As shown in the facts above, the precontract dealings of the parties, the contract itself, and the subsequent dealings between the parties show that the clear intent and purpose of the contract was to directly and substantially benefit Better Baked." 138This statement is consistent, or is at least not inconsistent, with an approach that involves relying on pre and post-contractual communications to identify, or at least confirm, the status of the proposed third party beneficiary in a context where the contract itself manifested an intention to benefit a third party. 139In Mid-Valley, Florida Power sued Mid-Valley, Brown & Root and others. Florida Power contracted with Mid-Valley for design engineering services. Florida Power alleged that the engineering services were done in breach of contract. Mid-Valley was a wholly-owned subsidiary of Brown & Root. Florida Power's claim against Brown & Root was in negligence. Brown & Root wished to claim the benefit of a limitation of liability clause in the contract between Florida Power and Mid-Valley. 140The Court found that all of the parties knew that Brown & Root would perform the work, since Mid-Valley's staff were insufficient to handle the project. All of the pre-contractual dealings were with Brown & Root. Mid-Valley was only inserted as the contractor because Brown & Root was a non-union company and Florida Power was concerned about labour strife if Brown & Root were hired. Importantly, an executive from Florida Power admitted it was his understanding that the contract with Mid-Valley would also apply to Brown & Root. 141The United States Court of Appeals 11th Circuit relied on Goodell for the proposition that: "Florida courts have long recognized that a third party beneficiary need not be named in the contract, but that its status may be established by pre-contract and post-contract actions of the parties." 142Pitbull submitted that Mid-Valley, Inc should be limited to "its own unusual facts" given that the "contracting parties admitted that the contract was intended to apply to Brown & Root". Whether or not this is so is not necessary for me to decide. The statement of principle set out in Mid- Valley is completely reconcilable with the decisions Pitbull relies upon in the manner explained by Altonaga J in Belik, namely that establishing the "status" of the third party beneficiary can be undertaken by considering pre and post-contractual communications provided that there is first ascertained from the contract itself the intention to benefit third parties. The proposition stated in Mid-Valley appears to be concerned with the former and not the latter. 143The next decision relied upon is Warren v Monahan Beaches Jewelry Center, Inc ("Warren") 548 So 2d 870 (Fla 1st DCA 1989). Warren's fiancé (Andreson) purchased a diamond engagement ring from the Jewelry Center. Immediately prior to the purchase, Andreson informed the Jewelry Center that the ring was for Warren. The Jewelry Center made suggestions about an appropriate ring for Warren. Warren sued the Jewelry Center, claiming it was defective. 144The 1st District Court of Appeal found that the purpose of the contract was to give Warren a diamond ring. Warren was permitted to sue as a third party beneficiary. In Jenne, the 4th District Court of Appeal distinguished Warren, noting that there was no detailed written contract in Warren and the court was required to examine the parties' conduct to give definition to the unspoken agreement. Thus the outcome in Warren is consistent with the analysis in Belik. 145The end result is that the statements of principle in the cases relied on by the plaintiffs are consistent with the analysis in [132]. 146Applying the above analysis I cannot discern any intention in the Agreement to benefit any third party such as another promoter. It follows that I reject the contention that Mr Uribe is a third party beneficiary to the Agreement under Florida law. 147Even if I adopted a wider approach than that which I have outlined in [132] based on Belik, then the most favourable case, at least on the facts, in favour of the plaintiffs is Mid-Valley. In both Goodell and Warren the documents and discussions that constituted the contract respectively at least each referred to the third party. In Mid-Valley, the third parties were not referred to in the contract other than perhaps the generic reference to "Engineer" (Mid-Valley at p 1319), but the balance of the evidence as to the intention to mutually benefit the third party was overwhelming. 148In this case the pre and post-contractual communications concerning the other promoters fall a long way short of establishing any mutual intention on the part of Mr Fernandez and Mr London for any other promoter to benefit. Leaving aside the Gold Coast concert, prior to the Agreement the only references to other promoters in their communications was in an e-mail dated 9 July 2008 to Mr Robert Fernandez ([18] above), the 13 October 2008 e-mail to Mr London ([24]) and the reference to "Don Juan Entertainment" in the press release attached to an e-mail sent to Mr London on 10 November 2008 ([32]). There is no evidence that the 9 July 2008 e-mail was sent to Mr London or any other legal representative of Pitbull. A single reference to "Don Juan Entertainment" on a press release, and the reference to "myself and other promoters" in the e-mail of 13 October 2008 do not, in my view, come close to establishing a mutual intention shared by Pitbull via Mr London for any other promoter to enjoy the benefit of the Agreement. Mr London was not told anything about these other promoters, including how many, which city and what their capacity to promote the concerts was. Given that, I do not see how silence in response to these communications constitutes evidence of a shared mutual intention to benefit other promoters. 149In relation to the communications sent after the contract, the only relevant communication was the e-mail from Mr London of 1 December 2008 when, in the context of there being a further delay in payment, he stated "Which promoters are you talking about? The ones in Melbourne and Sydney?" (see [62]). This might reveal a general awareness on the part of Mr London of the potential existence of promoters in other cities but that is all. He is clearly not aware that the Melbourne promoter had dropped out, nor do the e-mails suggest he was aware that any other promoter was contributing to the payments to Pitbull. In terms of a shared mutual intention, it does not advance the plaintiffs' case. 150It follows that I am not satisfied that Mr Uribe is a third party beneficiary to the Agreement.
Issue (3): Plaintiffs' damages 151In light of the outcome of the first issue, it is also not strictly necessary for me to determine the level of the damages, if any, that the plaintiff(s) are entitled to. Nevertheless, in the event that the matter proceeds to an appeal, it is appropriate that I make any necessary relevant findings of fact so as to minimise the risk of a retrial.
Preliminary matters 152The plaintiffs' claim for damages arising out of the cancellation of the tour was solely framed as a claim for lost revenue which it is said would have been derived had the tour proceeded. They did not make any claim for lost expenditure other than to the extent it may be recovered from ticket sales. Each set of parties filed an expert accountant's report addressing this issue. The accountants also prepared a joint report (and an erratum). The only difference between the experts concerned the likely ticket sales for the concerts. 153Subject to four matters which I will shortly address, it was accepted that the most appropriate course was for me to make findings as to the likely ticket sales for each concert. The parties stated that they would, if required, perform the necessary calculations based on those findings. If I had upheld the plaintiffs' claim then I would have made these findings and stood the matter over to enable the parties to bring in calculations to give effect to my findings. As I will dismiss their claims, I will simply record my findings on the level of likely ticket sales and they can be considered as appropriate if an appeal is filed. 154The four further matters are as follows. First, the accountant retained by the plaintiffs, Mr Shields, did not distinguish between the expenses incurred by Mr Fernandez and Mr Uribe, and instead grouped them together. This approach would be appropriate if I had resolved the second issue in their favour, but I did not. Had it been necessary to take this further, then it would have been necessary to apportion the expenses between each concert. 155Second, Pitbull asserts that so much of the plaintiffs' loss as flowed from the expenses incurred with unused airline tickets should not be recoverable, as clause 14 of the Performance Rider required them to purchase fully refundable tickets. He asserted that this was an application of the principle that a party to a contract is not entitled, as against the other party, to rely on an event resulting from the first party's wrongful act (citing Plumor Pty Ltd v Handley (1996) 41 NSWLR 30, at p 35 per McLelland CJ in Eq). I would agree with that submission simply on the basis of causation, i.e. that this aspect of the plaintiffs' loss was not caused by any breach by Pitbull in cancelling the Agreement, but by Mr Fernandez's failure to comply with clause 14. 156Third, Pitbull seeks to rely on that part of clause 26 of the Performance Rider which states: "[p]urchaser agrees to indemnify and hold Artist harmless from any and all claims, liabilities, damages" (see [35]). He submits that it excludes any liability for his breach. I do not agree. Clause 26 is clearly directed to claims against Pitbull from third parties. It does not exonerate any breaches by him of his obligations under the Agreement. At the very least such an interpretation is reasonably open and, in the event of ambiguity, a provision such as clause 26 is to be read contra proferentem Pitbull (Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82; 161 CLR 500 at 510). 157Fourth, Pitbull submits that Mr Fernandez failed to mitigate his loss. He contends that he should have first sued Mr Uribe for his failure to provide funds to enable him to pay Pitbull on time. He contends that, in any such action, Mr Fernandez would have recovered the lost revenue from the concerts from Mr Uribe rather than Pitbull. I do not accept these arguments. At this point I am considering the quantum of damages recoverable on the hypothesis that, contrary to my findings, Pitbull repudiated the Agreement as varied when he cancelled the tour. On that hypothesis the primary cause of any loss suffered by Mr Fernandez was Pitbull's conduct and not Mr Uribe's failure to pay funds on time. In any hypothetical action between Mr Fernandez and Mr Uribe, the latter would no doubt argue that Mr Fernandez's loss was caused by Pitbull's breach and he should mitigate his losses by first suing Pitbull and not him. Even if lost profits or revenue from the concerts were recoverable from Mr Uribe by reason of the latter's failure to pay Mr Fernandez on time, I cannot accept that he failed to mitigate his loss by suing Pitbull first.
Likely ticket sales 158The public announcement that the tour was cancelled was made on 5 December 2008. Evidence was adduced of the level of ticket sales as at 4 December 2008. I am assuming that they represent sales at the close of business on that day, although in the age of internet sales that may be midnight. In any event, the level of sales that had been achieved as at 4 December 2008 was: Venue Tickets sold Venue capacity (i.e. max less 30 tickets reserved for Pitbull) % sold Perth 124 (45 via Heatseeker and Moshstix) 1,870 6.5% Melbourne 142 (via Oztix and Ticketek) 1,570 9.0% Sydney 874 (419 via Ticketek, 59 direct from venue and 396 via promoter) 2,170 40.0%
Ticketek, Oztix, Heatseeker and Moshtix are ticketing agencies that take bookings either online, on the phone or through direct outlets. 159As I understand the position, 45 of the tickets listed as sold for the Perth concert were for the original date of Friday, 5 December 2008, and not the revised concert date of Wednesday, 10 December 2008. 160The evidence from the witnesses touched on various issues relevant to likely ticket sales, namely the absence of any interview with Pitbull promoting the tour, the level of promotion for the tour, the depressive effect on sales of an alleged suspicion held by fans that Pitbull might, like other overseas artists, cancel at the last minute, and Pitbull's ability to fill the concert venues. I will summarise the evidence and my findings on those topics below.
Tour publicity 161Promotional material was prepared for each of the concerts. Mr Uribe described the advertising that he arranged for the Sydney concert as follows: " 3D World full page colour street press advertising over 4 weeks with a CAB Audit circulation of 12,500 people; NES Australia - A feature in the Down Low Magazine. 60,000 magazines were printed. 50,000 were distributed by direct mail per month for five months; 2 SMS messages per person were sent to NES Australia SMS database of 5,000 people; Emails were forwarded to the NES Australia Email database of 25,000 people every week for 6 weeks; Sydney Pole posters were distributed during the 6 weeks prior to the concert date; Radio concert drops on The Edge and on local Latin radio stations during the last 2 weeks prior to the concert date; My Space promotion and 12,000 invitations to Facebook events; Promotional material and advertising on the Groove On website (222.grooveon.com.au) and a mail out; Public relations exercises were organised by Xposed Media, including exposure in MX Newspaper, Cover of Homebase in 3D magazine and various radio interviews. I assert that the interviews did not proceed due to the Defendant's unavailability at meeting interview times. Urban Nightclub promotions for two months prior to concert, including two free tickets each week." 162He also described the advertising he undertook for the Melbourne concert as follows: " Promotional material and advertising on the Groove On website (www.grooveon.com.au); Public relations exercises were organised by Xposed Media, including exposure in MX Newspaper, Beat magazine and various radio interviews. I assert that the interviews did not proceed due to [Pitbull's] unavailability at meeting interview times. Eddie Cox street and night club announcing, advertising and promotions during the 2 months prior to the concert date; and RNB Superclub email blasts and mailout to a database of 20,000 people." 163No similar description was provided for the Perth concert by Mr Fernandez. The only evidence of advertising specific to that concert is various invoices suggesting the placing of advertising in the publication "Xpress" on 30 October 2008, 20 November 2008, 27 November 2008, 4 December 2008 and another unknown date. 164In addition, Ms Petrina Convey of Xposed Media was appointed the public relations agent for the tour on 27 October 2008. She has fifteen years experience in the music and entertainment industry and publicised a number of touring artists including Akon, Ne-Yo, Flo-Rida, Boyz II Men, Snoop Dogg, Ice Cube, LL Cool J, Chris Brown and T-Pain. She immediately advised of the need to have Pitbull fly to Sydney on Thursday 4 December 2008 to undertake promotional work, including a photo shoot and television appearances on "Channel V" or "MTV". Later in November 2008 she was advised by Mr Fernandez that Pitbull was scheduled to spend four hours in an airport lounge between 8.00am and 12.00pm on 4 December 2008. She responded that neither the photo shoot nor a radio interview could occur in that time and the best course was to have Pitbull spend the day in Sydney. 165In early November 2008 the music publication "Rhyme and Reason" published a two page interview with Pitbull. The substance of the article did not mention the Australian tour but at the conclusion of the article there was a reference to the proposed tour and the dates of the concerts. 166In something of a harbinger of later events, Mr Fernandez was slow in paying Ms Convey's account. On 10 November 2008, after she received part payment of her invoice, she issued a press release announcing the tour. The balance of her invoice was still outstanding as at 27 November 2008. In her affidavit Ms Convey outlined her ill-fated attempts to arrange an interview with Pitbull in the latter part of November 2008 which was meant to be published in "3D World". She was advised of the cancellation on 4 December 2008 and provided Mr Fernandez and Mr Uribe with a press release advising of the cancellation on 5 December 2008. 167Ms Convey expressed the opinion that if artists "are not co-operative and forthcoming with interviews, providing video and audio drops and updating their official websites, the Australian urban community tends to be suspicious about the legitimacy of the tour and this is reflected in ticket sales". Four matters should be noted about her evidence and this opinion in particular. 168First, as I have stated, Pitbull was not obliged by the Agreement to submit to an interview in advance of the tour. Second, Ms Convey was supplied with the video and audio drops. Ms Convey described the audio drops as being of only "little" importance. I have set out part of the transcript of the drops at [53]. She accepted that she would have used the video drop to promote the Pitbull Tour although she could not recall doing so. Third, Mr Uribe put Pitbull's video drop on Facebook as soon as he received it "to hype up the concert". Fourth, in cross examination Ms Convey accepted that the interview in Rhyme and Reason, which included the Pitbull Tour dates, was "great coverage" and "a really good way to promote the tour", but added: "It was, but it wasn't for the tour. The interview that Pitbull did, he spoke about an album and everything but, and the editor just slipped at the bottom tour dates. He didn't talk about the tour."
Mr Uribe's evidence concerning further ticket sales for Sydney 169Following objection by Pitbull, Mr Uribe gave evidence on a voir dire that he retained a "written list" of people who advised they wanted to purchase a ticket "on the night at the door" either by "confirm[ing] on Facebook or through a phone call or through an SMS for me to hold onto tickets for them". He said that based on his experience "with the other concerts and with the nightclubs, generally ... you would have got about 50% of the actual number [of 400] buying the tickets". In cross examination he revised that to a minimum of 50%. Mr Uribe also asserted that there were another 200 to 500 people who "would have randomly just come on the night" being "[p]eople that have seen my advertising but they are not directly linked to me through social networks or one on one basis". 170In the end Pitbull did not pursue this objection but submitted that this part of Mr Uribe's evidence was entitled to little or no weight. Mr Uribe's evidence as to the existence of a list containing 400 people who were interested in purchasing tickets is clearly not opinion evidence. Further, I do not accept that his evidence as to the figure of 50%, or a minimum of 50%, was inadmissible opinion evidence. These estimations were based upon his previous experience. His level of experience was more than sufficient to support his giving such evidence as to the purchasing behaviour of a group with whom he had dealt with. I accept these aspects of his evidence. 171Mr Uribe's opinion that another 200 to 500 people would purchase tickets at the door is clearly opinion evidence. This estimate was at least in part based on three concerts for the "Don Omar" tour on 6, 7 and 8 November 2011 in which in total he pre-sold 1,750 tickets and sold a further 600 tickets at the door (i.e. over 33%). It was not clear how that figure interrelated with any door list that he may have maintained for those concerts. The effect of Mr Uribe's evidence is that in respect of Sydney he expected somewhere between 400 and 700 extra tickets to be sold at the door or at least in the last weekend before the concert, against total sales of 874 to 4 December 2008. He did not address the Melbourne concert.
The Experts 172Pitbull relied upon a report from a promoter, Ms Mariah Athanasiadis. She has been involved in live music promotion for more than ten years. Ms Athanasiadis arranged the "Roc Tha Block" concerts that featured Pitbull in 2007. 173Ms Athanasiadis considered that Pitbull's popularity in Australia had grown in 2008, but not significantly. She noted that he had no major chart successes in Australia at that time. His recorded music was only just starting to receive major radio air play. 174Ms Athanasiadis does not consider that Pitbull was sufficiently popular in 2008 for his name alone to generate significant ticket sales for a concert in an Australian capital city in which he was the sole billed artist without substantial paid promotions and marketing effort. Ms Athanasiadis considers that the popularity of the artist is the most important factor in determining ticket sales. 175Ms Athanasiadis explained that the second most important factor is the amount of marketing and promotion that is undertaken by the live music promoter, and the manner in which it was undertaken. She considered that it was necessary to promote the Pitbull Tour at least six to eight weeks before its commencement. The promotions should have included print advertising, television advertising, radio advertising, SMS mass advertising, direct email, street posters and flyers. She considered that the paid advertising that was undertaken for each of the concerts was inadequate. 176In Ms Athanasiadis' opinion door sales typically represent a small share of ticket sales and no more than 10% to 15% of the total sold. She considered that advance ticket sales give an indication of how many sales will be achieved in the final few days before the concert and at the door so that if less than 10% of tickets are sold in advance very few door sales are expected. She considered that it was likely that only an additional 2% to 3% of tickets would be sold for the Perth and Melbourne concerts, and that it was likely that a further 5% to 10% of tickets would be sold for the Sydney concert. 177Ms Athanasiadis did not accept that last minute ticket sales were affected by any suggestion that Pitbull had a reputation for not turning up at concerts. The only Australian performance Pitbull had given prior to December 2008 was in the 2007 Roc Tha Block tour. Pitbull appeared in each of those concerts. She noted that Pitbull supplied audio and video drops which said that he was coming to Australia. 178Ms Athanasiadis considered that the change of date for the Perth concert from Friday, 5 December 2008 to Wednesday, 10 December 2008, would only have resulted in a small, but not significant, reduction in overall ticket sales. 179I make three observations about Ms Athanasiadis' evidence. First, to an extent, the focus on the alleged deficiencies in the plaintiffs' advertising of the concert tour is beside the point. The question for me is not whether Pitbull's concerts could have been promoted better but simply what level of ticket sales would have resulted from the promotion that did occur. Second, Ms Athanasiadis did not directly address the plaintiffs' point which was not that Pitbull had a reputation for not turning up, but that there was a general scepticism of overseas artists being promoted to tour but not arriving. She was questioned about a very significant number of cancellations by overseas acts in the immediate years before these concerts. She accepted that to a "certain extent" fans in Australia of R & B and hip hop were cautious of overseas artists. Third, I share the plaintiffs' scepticism of the utility of television advertising for a concert of this kind in 2008. It strikes me as relatively expensive for concerts of this size and difficult to focus to the preferred target market of fans of urban hip hop. 180The plaintiffs called Mr Ruchitha Perera, an event and concert promoter who also "runs" nightclubs in Australia and New Zealand. Mr Perera had some involvement in a business which operates under the name "Urban Agent" and it invested in Paper Chase Touring and Entertainment Pty Ltd which organised the "Supafest Festival", and was also "involved in touring Pitbull" in 2010. He described Pitbull as a "niche artist" in 2008 and disagreed with Ms Athanasiadis that television would have been an appropriate form of promotion for Pitbull in 2008. He described the plaintiff's promotional methods of posters, flyers and street press as "sufficient" and one he would have adopted. In oral evidence he also referred to the importance of relying on social media such as Facebook. 181Mr Perera stated that there was a loss of confidence in the "urban music industry" around 2008 as other overseas artists had cancelled at that time. In his opinion the low advance sales tickets was said to "predominantly" result from a "failure [of Pitbull] to attend to his press obligations and give interviews". Mr Perera down-played the significance of the interview in Rhyme and Reason because "it wasn't really targeted towards the core following of Pitbull's fan base". He did not accept that the concert postings on Pitbull's facebook website would overcome fans' concerns "because just one piece of information, wouldn't dispel a lot of people's, you know, bad experiences during that time period". 182He estimated that "approximately 33% of the total tickets for the concerts would have been sold at the last minute or at the door if the general public were satisfied that the tour was going ahead". In cross examination he clarified that this concerned the Sydney concert and he revised the percentage to 30-40%. He explained: "For the Melbourne and Perth shows I would expect probably 300, 400 tickets to be sold last minute. I based the percentage for the Sydney show with the understanding that perhaps around 1000 tickets were sold for the Sydney show. So I estimated probably about, 300, 400 tickets to be sold last minute." 183I note the following concerning Mr Perera's evidence. As I have explained, under the Agreement Pitbull did not have any "press obligations". To the extent that ticket sales were depressed because of a lack of promotion on Pitbull's part then it is a problem for the plaintiffs. 184The estimate he gives of a 33% uptake, or a 30% to 40% uptake or 300 to 400 tickets just prior to the concerts has a number of difficulties. I was not presented with any real explanation of how that figure was derived, other than that it was "an estimate based on previous experience". The variations in his evidence from a percentage to an estimate of ticket numbers indicates the imprecision in his forecasting. In the case of concerts where the sales at the time of cancellation (e.g. Melbourne) were low, then the application of his 30% to 40% figure range only results in a likelihood of a further sale of 40 to 60 tickets. If there was a depressive effect flowing from a concern about overseas artists cancelling, then one would expect more than 40 to 60 sales at the last minute. I have found the concept of a percentage of sales for last minute tickets of some utility in the case of the Sydney concert, where there were significant pre-concert sales, but of little assistance with the Melbourne and Perth concerts where there were not. 185Nevertheless I accept so much of his evidence as involves the contention that there was likely to be a greater than usual last minute uptake once it became clear that Pitbull had arrived in Australia. This was so because of the combination of recent overseas artists cancelling, and the lack of any interview from Pitbull specifically promoting the tour and implicitly confirming his attendance.
Consideration 186I have made some findings as to Pitbull's profile at [8] and noted Ms Athanasiadis' evidence on that topic at [174]. The plaintiffs also sought to draw support from a tour of parts of the USA undertaken by Pitbull in March and April 2008, the "House of Blues" tour, in which he regularly filled venues with capacities of between about 1,000 to 2,500 people. The plaintiffs contended that this was an example of his "drawing power" as a performer. Pitbull submits that there is no basis to infer that his popularity in the US (with its large Latino community) at that time necessarily reflected his popularity in Australia. There was little evidence which would enable me to make any comparisons between the House of Blues tour and Pitbull's proposed tour of Australia in late 2008. I do not know the ticket prices for that tour, how it was promoted, whether Pitbull had ever performed in the regions of that tour previously and, if so, how many times. I do not know the demography of the regions covered by those tours. Nevertheless, the findings that I have made enable me to conclude that, in late 2008, there were realistic prospects of Pitbull drawing substantial and potentially capacity crowds, depending upon how effectively the tour was promoted. 187To that extent, this is supported by an email that a booking manager at Luna Park, Ms Sophie Vallis, sent to Mr Uribe dated 11 November 2008. The plaintiffs placed much reliance upon this email. Ms Vallis stated that she had made a comparison of ticket sales to that point with other shows such as a similar concert involving "Flo Rida" and considered that the Pitbull concert would be expected to sell about 1600 tickets. She added in her email: "We have found when dealing with urban/rnb/hip hop shows that the customers tend to leave it until the very last minute before they buy tickets, when they can be certain that the act is actually coming, as there have been many acts of this nature which have been advertised and then failed to turn up as visas haven't been obtained or fees haven't been paid etc." 188It follows from the discussion above at [185] that I accept that this was a factor of some significance that was depressing ticket sales, and was likely to lead to greater than expected sales in the immediate days before a concert and at the door once it was clear that Pitbull was in Australia. Ms Athanasiadis conceded that was so, although I consider that it was likely to be more significant than she was prepared to accept. However, the email from Ms Vallis only addresses the Sydney concert and the position as at 11 November 2008, and not the promotion that occurred or did not occur thereafter. 189I have already described the evidence concerning the tour promotion. The most significant gap in the promotion was the absence of any interview with Pitbull specifically promoting the tour. At the hearing the plaintiffs placed much emphasis upon that and Pitbull sought to downplay its depressive effect on ticket sales. I agree with the plaintiffs that it was significant but such a finding is of no assistance to them. It was not contended that Pitbull was obliged to give any such interview (and for that reason I have not addressed whose responsibility it was for it not occurring). However I accept that it is highly likely that once Pitbull arrived in Australia he would have participated in an interview and some other forms of promotion that would have confirmed his involvement in the tour. While he may not have been contractually obliged to, having arrived in Australia he would have had an obvious interest in seeking to ensure that the tour was a success (see TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130, at 150 to 156 per Hope JA). 190Against this background it is necessary to address each concert, and I will do so in chronological order. 191After the rescheduling arranged by Mr Fernandez, the first concert was to be performed in Melbourne on the evening of Saturday, 6 December 2008, with Pitbull having arrived in Australia on 5 December 2008. The prospects for that concert were particularly bleak. The ticket sales figures as at 4 December 2008 reveal very poor sales (142). There were only two further days for sales. There would have been little time between Pitbull's arrival in Australia and the time of that concert to promote it. Even the most avid hip hop fans in Melbourne can be expected to make alternative plans to do something else in that city on a Saturday night, notwithstanding the end of the AFL season. The evidence of tour promotion for Melbourne is relatively sparse. Most significantly, neither of the plaintiffs were based in Melbourne. Thus there was no local promoter with contacts such as those that Mr Uribe had in Sydney. In these circumstances I cannot see how the Melbourne concert could have achieved significant sales. 192As at 4 December 2008, 148 tickets had been sold. Allowing for a substantial last minute rush I still cannot see how more than 200 further tickets would have been sold. In fact, I expect 150 was the more likely figure. This would represent a portion of the "hard core" Pitbull fans whose suspicion of his not touring had been overcome and who had not made alternative plans (or had cancelled them). After rounding, I find that the likely number of total tickets that would have been sold for the Melbourne concert was 310. 193It is not clear from the evidence whether this low level of sales would have led to the Melbourne concert being cancelled at the last minute or proceeding in a near empty venue. I will nevertheless consider the Sydney concert on the basis that it was not adversely affected by whatever would have occurred in Melbourne. The prospects for the Sydney concert were clearly much stronger. As at 4 December 2008, 874 tickets had already been sold. It had a local promoter who was well connected to fans of hip hop music. I accept his evidence to the extent that he said he would have most likely sold a further 200 tickets directly through his own efforts (out of his list of 400 persons who had contacted him). Mr Uribe's evidence also describes reasonably substantial promotion of that concert. The concert had the benefit of the entire weekend to capitalise on the presence of Pitbull in Australia to achieve last minute and door sales. The combination of Mr Uribe's 200 tickets and the 874 already sold brings the total to 1,074. Given the factors I have identified, which would have negated the suspicion that Pitbull was not coming and allowed fan interest to be capitalised upon, I consider that a further 350 tickets would have been sold on the weekend or at the door. This is in the order of the 33% initially suggested by Mr Perera, but exceeds the range of figures considered by Ms Athanasiadis. After rounding, I find that the likely number of total tickets that would have been sold for Sydney was 1,425. 194The likely ticket sales for the concert in Perth on Wednesday, 10 December 2008, is the most difficult to gauge. As at 4 December 2008 only 124 tickets had been sold and some of those were for the original concert date of 5 December 2008. However, I expect that those sales represented rusted-on Pitbull fans who would have attended on the rescheduled date. The evidence of the promotion of this concert is sparse. On the other hand the concert had a local promoter, Mr Fernandez, who had experience in this segment of the music scene in Perth. In addition it had the benefit of a number of days to sell tickets after Pitbull's arrival in the country (i.e. from 5 December to 10 December 2008). For that reason, both Mr Perera's and Ms Athanasiadis' percentage based analyses of last minute and door sales is less apposite to Perth. As I have explained, the application of a percentage to the tickets sold does not seem to me to be appropriate. Bearing in mind the imprecision involved, I estimate that another 300 tickets would have been sold for this concert. The extra days to sell tickets after Pitbull's arrival would have been crucial, although the sales were coming off a very low base. 195I find that, after rounding, the likely number of total tickets that would have been sold for the Perth concert was 425. 196As I have stated, the parties indicated that based on my findings as to the likely ticket sales the relevant losses, if any, occasioned by the cancellation of the tour could be ascertained. On my understanding of these findings, however, it is likely that there was only a loss on the Sydney concert arising from the cancellation.
Issue 4: The Plaintiffs' claim for recovery of the deposit 197Paragraph 20 of the Third Amended Statement of Claim sought recovery of the amount of US $30,000.00 retained by Pitbull. This corresponded with the first payment required by the Agreement. Paragraph 20 pleaded that these funds were retained by Pitbull "without lawful justification or excuse". As I understand, recovery of this amount was sought both in the event that it was found that Pitbull was entitled to terminate the Agreement and if he was not. I will only address the former scenario. 198Pitbull's short but correct answer to this claim is that in the Agreement this amount was described as a "deposit" and as stated in Commissioner of Taxation v Reliance Carpet Co Pty Ltd [2008] HCA 22; 236 CLR 342 at fn 21 (citing Hall v Burnell [1911] 2 Ch 551): "In the absence of an express contractual stipulation to the contrary, a vendor terminating a contract for default by the purchaser in completion is entitled to retain the deposit, as an implied term upon which the deposit was provided." 199As I have found that Pitbull validly terminated the contract "for default by [the plaintiffs] in completion", it follows that he can retain the deposit as a matter of contractual right. Once that conclusion is reached there is no room for any restitutionary claim to outflank this contractual right (Lumbers v W Cook Builders Pty Ltd [2008] HCA 27; 232 CLR 635 at [79] per Gummow, Hayne, Crennan and Kiefel JJ).
Issue 5: Pitbull's Cross Claim 200In his cross claim Pitbull seeks to recover loss of bargain damages for the benefits that he expected to receive had the Agreement not been terminated; i.e. the balance of the payments due under the Agreement (and possibly for the Gold Coast concert) less the additional costs and expenses he would have incurred. 201The principal difficulty with this claim is that it was Pitbull who terminated the Agreement on 2 December 2008 in accordance with its terms, albeit as a result of the plaintiffs' failure to make payments in accordance with the Agreement. In those circumstances he cannot recover for his loss of bargain (Shevill v Builders Licensing Board [1982] HCA 47; 149 CLR 620) unless those breaches would have justified the termination of the Agreement at law; i.e. they amounted to a repudiation or fundamental breach and not merely a breach of a non-essential term which nevertheless constituted conduct entitling termination pursuant to clause 7 of the Agreement (Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; 157 CLR 17 at 31 per Mason J). 202In oral submissions senior counsel for Pitbull suggested that the failure of the plaintiffs to have arranged appropriate air transportation as at 2 December 2008 amounted to a fundamental breach or repudiation for these purposes. It follows from the observations at [121] to [122] that I reject the premise of that contention. Otherwise there were no submissions directed to whether the failure to make payments in accordance with the Agreement constituted conduct that would entitle termination of the Agreement at law. Assuming for present purposes that time was of the essence in relation to the making of those payments, and leaving aside clause 7, the failure of Pitbull to terminate following their non-payment (i.e. on 14 November 2008 and 26 November 2008) meant that rescission at law could only have occurred if notice was given requiring performance within a reasonable time which elapsed before termination (Carr v JA Berriman Pty Ltd [1953] HCA 31; 89 CLR 327 at 348 to 349 per Fullagar J). That did not occur. 203Accordingly I will dismiss Pitbull's cross claim.
Conclusion and orders 204In summary I have found that: (i) Pitbull validly terminated the Agreement on 2 December 2008. (ii) Mr Uribe was not a third party beneficiary of the Agreement under the law of Florida. (iii) Had the Agreement continued, the likely total ticket sales for each of the Melbourne, Sydney and Perth concerts were 310, 1425 and 425, respectively. (iv) Pitbull is entitled to retain the deposit of US$30,000.00; and (v) Pitbull is not entitled to loss of bargain damages in respect of the Agreement. 205It follows that I will dismiss the Third Further Amended Statement of Claim and the Cross Claim. I will direct the parties to file brief written submissions on the question of costs within fourteen days. If either party wishes to address orally on the question of costs, they should so indicate in their submissions and provide available dates. 206Accordingly the Court orders that: (1)The Third Amended Statement of Claim be dismissed. (2)The Cross Claim be dismissed. (3)On or before 1 November 2012 the parties file and serve written submissions on the question of costs together with any affidavits in support, with such submissions not to exceed four pages. (4)There be liberty to apply on three days' notice.
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: 17 October 2012
Fernandez
Perez
[1986] HCA 82
[2005] HCA 13
(1996) 41 NSWLR 30
(1989) 16 NSWLR 130