Jamie Fernandez t/as Suave Productions v Armando Christian Perez t/as Pitbull

Supreme Court of NSW|2011-08-25|Before: Barwick CJ

Judgment 1HER HONOUR: By notice of motion filed 25 March 2011, the defendant seeks, firstly, an order that the proceedings commenced by the second plaintiff be dismissed generally pursuant to Rule 13.4 of the Uniform Civil Procedure Rules 2005 ("the UCPR"); or alternatively, that prayers 1-5 (appearing under the heading "The Second Plaintiff claims") and paragraphs 3-7, 10 and 18 be struck out pursuant to Rule 14.28 of the UCPR. 2The first plaintiff is Jamie Fernandez t/as Suave Productions ("Mr Fernandez"). The second plaintiff is Juan David Uribe t/as Don Juan Entertainment ("Mr Uribe"). The first defendant is Armando Christian Perez t/as Pitbull ("Pitbull"). The second defendant is Pitbull Productions Incorporated. 3The plaintiff relied on two affidavits of Mr Fernandez sworn 24 February 2011 and 26 November 2011, an affidavit of Mr Uribe sworn 21 February 2011 and on two affidavits of Susan Capote dated 25 January 2011 and 8 June 2011. The defendant relied on the affidavit of Cameron Graeme Andrews sworn 25 March 2011.

Summary judgment 4Rule 13.4(1) of the UCPR provides that the Court may dismiss proceedings generally, or in relation to any claim for relief, in three circumstances. These are, if the proceedings are frivolous or vexatious, or if no reasonable cause of action is disclosed, or if the proceedings are an abuse of the process of the court. 5Rule 14.28(1) of the UCPR provides that the Court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading firstly, discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, secondly, has a tendency to cause prejudice, embarrassment or delay in the proceedings, or thirdly, is otherwise an abuse of the process of the court. The defendant submitted that to maintain proceedings by the second plaintiff is an abuse of process. 6Summary strike out applications have been discussed in General Steel Industries Inc v Commissioner for Railways [1964] HCA 69; (1964) 112 CLR 125 at 129 and restated in many decisions since then. In General Steel , Barwick CJ who sat as a single judge said that a litigant should not be denied access to the appropriate tribunal unless his lack of a cause of action is clearly demonstrated. His Honour stated at 219: "The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense"." 7For the purposes of this application I have accepted the plaintiff's evidence at its highest and should this matter proceed to trial, some of this evidence will be disputed.

Background 8These proceedings concern a breach of contract claim brought by Mr Fernandez t/as Suave Productions and Mr Uribe t/as Don Juan Entertainment against Armando Christian Perez t/as Pitbull. Mr Fernandez and Mr Uribe are music promoters. Pitbull is a "Latin Hip Hop" and "Rap" musician based in Florida. Mr London, known as Mr Purple, is Pitbull's agent. Mr Fernandez and Mr Uribe allege that they entered into a contract with Pitbull whereby Pitbull agreed to perform concerts in Australia in December 2008. Mr Fernandez and Mr Uribe alleged that Pitbull breached that agreement by failing to perform the concerts. It is common ground that the law of Florida in the USA is applicable. 9In the amended statement of claim, Mr Uribe had alleged that it is entitled to sue for breach of contract on two inconsistent bases, namely that, (a) it is a party to the agreement which was entered into by its agent, Mr Fernandez; and (b) it is a "third party beneficiary" to the agreement. Counsel submitted now, as more evidence has emerged, Mr Uribe now bases his claim on him being a "third party" beneficiary only. The pleading of an agency agreement between the plaintiffs is no longer pressed. 10Messrs Fernandez and Uribe have served their lay and expert evidence The defendants have not served any evidence as yet.

The pleading so far as Mr Uribe is concerned 11Mr Uribe now seeks the following relief. (1) A declaration that he is a third party beneficiary to the Pitbull Performance Agreement as varied, executed by Mr Fernandez and Barry London as agent on behalf of the defendant. (2) A declaration that the defendant breached the Pitbull Performance Agreement as varied. (3) Damages and restitutionary damages. 12The main issue in dispute, on this application, is whether the proposition that Mr Uribe is a third party beneficiary of the contract is an arguable one. 13Around Easter 2008 discussions took place between Mr Uribe and Mr Fernandez regarding the promotion of a number of artists both from Australia and internationally to perform at various venues throughout Australia, one of those artists included the artist known as Pitbull. 14Between March and July 2008, about once every two to three weeks, they had a number of discussions. In July 2008, after Mr Fernandez had made contact with Pitbull's management, they talked daily. 15Mr Uribe deposed that from time to time they varied the terms of that agreement, however ultimately the agreement between them was Mr Fernandez would bring out Pitbull to tour and Mr Fernandez would execute contractual documentation to that effect. 16In June and July 2008, the plaintiffs entered into an agreement between themselves that was partly oral and partly in writing. To the extent that the agreement was oral the plaintiffs rely upon conversations that they had in June/July 2008. To the extent that the agreement was in writing the plaintiffs rely upon email and Blackberry transmissions made between them in June and July 2008. It was a term and condition of the agreement between the plaintiffs that the first plaintiff would procure a contract between him and Pitbull to perform concerts in Perth and Melbourne. 17Additionally, for consideration of US$66,000 Mr Fernandez agreed to produce Pitbull's attendance at venues in Sydney and Melbourne where Mr Uribe would retain the entirety of the profits of the Sydney concert and half of the profits from the Melbourne concert. It is alleged that at all times Pitbull retained Mr Purple as a manager or agent. 18It is alleged that the failure by Pitbull to attend and perform at the said venues constituted a breach of the varied written Pitbull Performance Agreement wherein Mr Fernandez has sustained substantial loss and damage as a principal contracting party to the Pitbull Performance Agreement and Mr Uribe has further sustained substantial loss and damage as a third party beneficiary to and agreement called the Pitbull Performance Agreement (Further Amended Statement of Claim at [18]). 19On 8 November 2008, Mr Fernandez executed a written agreement to procure the services of Pitbull with his agent, Mr Purple, who executed the same document on 11 November 2008 (the Pitbull Performance Agreement). 20It appears that a copy of the contract in evidence is an incomplete one as the amounts for the guaranteed fee and the advance/deposit amount and date it was due have been left blank. Paragraphs [7] and [8] of this contract read: "7. This Agreement and the attached Performance Agreement Rider and Sound Reinforcement Rider, which by this reference are incorporated into and made a part of this Agreement, constitute the entire agreement between the parties and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written. There are no warranties, representations, and/or agreements among the parties in connection with the subject matter of this Agreement, except as specifically set forth and referenced in this Agreement and the attached Riders. This Agreement shall be governed by Florida law, is binding and valid only when signed by the parties below; and may be modified only in a writing signed by the parties. If Artist has not received the deposit in the amount and at the time specified in subsection 4(b, c), then Artist thereafter at anytime shall have the option to terminate this Agreement. 8. The persons signing this Agreement on behalf of Artist and Purchaser each have the authority to bind their respective principals." 21Pitbull contends that he was not paid an advance by the due date. It is common ground that he did not travel to Australia to attend the concerts scheduled for 5, 6 and 7 December 2008.

The contract between Fernandez and Uribe 22On 11 November 2008, Mr Fernandez and Mr Uribe entered into a written agreement. Mr Uribe says that he purchased parts of the tour, namely Sydney and subsequently two thirds of the Melbourne tour. Mr Uribe would be responsible for all of the costs related to putting on the Sydney concert, two thirds of the costs associated with putting on the Melbourne concert and five ninths responsible for the common costs of the tour such as international air fares. Mr Fernandez and Mr Uribe had agreed to do a full reconciliation of accounts and payments made at the end of the tour. 23Mr Fernandez would be responsible for payment of the initial deposit to Pitbull via his agent, Mr Purple. The initial deposit was to be applied towards the performance fee. Mr Uribe was required to fund the second and final instalment of the performance fee. On 3 December 2008, Mr Uribe paid US$51,000 (AUD$80,543.27) via international money transfer. 24Mr Uribe concedes that he never had any direct dealing with Pitbull or Mr Purple. All of his dealings regarding the interest that he had in Sydney and two thirds of the revenue for Melbourne were conducted on his behalf by Mr Fernandez. It was the usual practice that Mr Fernandez would ring Mr Uribe before he spoke to Mr Purple and they would discuss what needed to be said. Mr Fernandez would then call him back after his discussions with Mr Purple and debrief him on what had occurred. They were in constant contact. 25In November 2008, Mr Uribe received an audio drop and video drop (meaning audio or video promotional messages) from Pitbull. One audio drop makes specific reference to Mr Uribe by his stage name DJ Don Juan. Mr Uribe engaged a publicity company to promote the Pitbull tour. Pitbull did not give an interview that would have been used to promote his tour.

Third party beneficiary and Florida law 26Pitbull's Senior Counsel submitted that the contention that Mr Uribe is a third party beneficiary of the contract is not supported by any pleading of material facts. According to Pitbull, the only reference to the third party beneficiary claim is paragraph 18 of the further amended statement of claim. That paragraph (reproduced earlier in this judgment at [18]) pleads that Mr Uribe had further sustained substantial loss and damage as a third party beneficiary to the contract. Pitbull submitted that as there are no material facts pleaded to support this cause of action means that Mr Uribe's pleadings are so imprecise as to be embarrassing, an abuse of process and they should be struck out. 27I accept that the evidence of Mr Uribe is that he never had any direct dealing with Pitbull or Mr Purple. I also accepted dealings on Mr Uribe's behalf with Pitbull and Mr Purple were conducted by Mr Fernandez. 28However, it is important to keep in mind that Pitbull and Mr Purple have not put on evidence so it is unknown what they say they were told, if anything, about the arrangement with Mr Uribe. 29Both parties agree that the legal position in Florida in relation to third party beneficiaries is set out in Caretta Trucking Inc v Cheoy Lee Shipyards Limited, US Paint Corporation and Tomas Fexas Design Corporation 647 So2d 1028 where it states: "A person who is not a party to a contract may not sue for breach of that contract *1031 where that person receives only an incidental or cons e quential benefit from the contract. Metropolitan Life Ins. Co. v. McCarson, 467 So.2d 277 (Fla.1985). The exception to this rule is where the entity that is not a party to the contract is an i n tended third party beneficiary of the contract. Jacobson v. Heritage Quality Constr. Co., 604 So.2d 17 (Fla. 4th DCA 1992 ) , dismissed, 613 So.2d 5 (Fla.1993). A party is an intended benefic i ary only if the parties to the contract clearly e x press, or the contract itself expresses, an intent to primarily and directly benefit the third party or a class of persons to which that party claims to b e long. Aetna Casualty & Surety Co. v. Jelac Corp., 505 So.2d 37 (Fla. 4th DCA 1987 ) ; Warren; Security Mut. Casualty Ins. Co. v. Pacura, 402 So.2d 1266 (Fla. 3d DCA 1981). Thus, in order to plead a cause of action for breach of a third party beneficiary contract, the following elements must be set forth: (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 b e longs); (3) breach of that contract by either A or B (or both); and (4) damages to C resulting from the breach. Additionally, in order to find the requisite i n tent, it must be shown that both contracting parties intended to benefit the third party. It is insufficient to show that only one party unilaterally intended to benefit the third party. See Clark and Co. v. D e partment of Ins., 436 So.2d 1013, 1016 (Fla. 1st DCA 1983). Based upon the foregoing, the initial issue presented is whether, taking the well-pleaded allegations as true and viewing them in the light most favorable to Caretta, the allegations of Count III sufficiently pleads all of these elements." 30It is element (2) that Pitbull contends is not satisfied and the third party beneficiary pleadings is doomed to fail. 31Ms Capote is an attorney at the law firm Lewis Teln PL located in Coconut Grove, Florida. She had provided a legal opinions (25 January 2011 and 8 June 2011) in relation to third party beneficiaries and the position of Mr Uribe under Florida law. Relevantly, at [7] to [11] and [14] of her opinion dated 8 June 2011, Ms Capote says: "7 Accordingly, if a contract does not specifically identify the third party beneficiary, a Florida court may look to the contracting parties' pre- and post- contract dealings to determine whether they intended to benefit a third party or a limited class of beneficiaries. 8 With respect to the November 2008 Pitbull Performance Agreement ("Agreement") at issue, the pre- and post- contract dealings between Jamie Fernandez ("Fernandez") and Barry London ("London"), Pitbull's agent, suggest that the parties contemplated a limited class of promoters as intended third party beneficiaries to the Agreement. 9 For instance, as set forth below, the pre- and post- contract emails between Fernandez and London routinely reference other promoters' involvement in connection with the Agreement.

"Suave Productions & Don Juan Entertainment Present Pitbull." Email from J. Fernandez to B. London (11/10/08) (attachment).
"I'm still waiting to hear back from Promoter in East Coast." Email from J. Fernandez to B. London (11/30/08).
"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!" Email from B. London to J. Fernandez (12/1/08).
"I will call you as soon as I hear back from the Promoter in Sydney." Email from J. Fernandez to B. London (12/1/08).
"Sorry I have been in a conference call with Eastern States promoter & other parties all day." Email from J. Fernandez to B. London (12/1/08). 10 As the parties' correspondence demonstrates, they intended to benefit a limited class of promoters under the Agreement, and Juan David Uribe t/as Don Juan Entertainment ("Don Juan Entertainment") was a member of that class. 11 Based on the foregoing, it is my opinion that a Florida court may conclude that Don Juan Entertainment was a member of a limited class of intended third party beneficiaries to the Agreement and, as a result, has a valid cause of action against defendants for breach of a third party beneficiary contract. ... 14 Based on the foregoing, it is my opinion that a Florida court may find that Don Juan Entertainment may recover against defendant as a third party beneficiary to the Agreement even though the Agreement was also expressly intended to benefit Suave Productions." 32It is my view that contrary to Pitbull's contentions, there is some evidence to support his case that he is a third party beneficiary to the contract. The evidence is the emails referred to by Ms Capote and the audio drop by Pitbull that refers to Mr Uribe by his stage name, DJ Don Duan. Additionally, Ms Capote, an expert in Florida law, has opined that Mr Uribe may recover against Pitbull as a third party beneficiary even though the agreement was expressly intended to benefit Suave Productions. The facts and circumstances in relation to Pitbull, Pitbull productions and Mr Purple may become clearer when they put on their evidence. It is my view that Mr Uribe's case that he is a third party beneficiary of the contract is arguable. This matter should proceed to trial. The defendant's notice of motion filed 25 March 2011 is dismissed. 33The second plaintiff has leave to further amend the statement of claim by deleting the pleadings that Mr Fernandez acted as Mr Uribe's agent. The matter is listed for a status conference before the Registrar on 23 September 2011. 34Costs are reserved.

The Court orders: (1) The defendant's notice of motion filed 25 March 2011 is dismissed. (2) Grant leave to the second plaintiff to further amend the further amended statement of claim by deleting the pleadings that Mr Fernandez acted and Mr Uribe's agent. (3) The matter is listed for a status conference before the Registrar on Friday, 23 September 2011 at 9.00 am. (4) Costs are reserved.

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: 02 September 2011

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