Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa

Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa - [2007] NSWSC 228 - NSWSC 2007 case summary — Zoe

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50161/05 LEADING EDGE EVENTS AUSTRALIA PTY LTD v KIRI TE KANAWA & ORS JUDGMENT Introduction 1 The plaintiff, Leading Edge Events Australia Pty Limited, is a company incorporated in Victoria and describes itself as a "promoter of events in the entertainment industry". The plaintiff brings these proceedings against the first defendant, Kiri Te Kanawa (Dame Kiri), a renowned opera singer, the second defendant, Nick Grace Management Limited (NGM), a company carrying on the business of theatrical agent, the third defendant, Nick Grace (Mr Grace), a director of NGM, and the fourth defendant, Mittane Limited (Mittane), a company incorporated in Jersey, Channel Islands, through which the services of Dame Kiri are provided. 2 The plaintiff claims damages for breach of a contract allegedly entered into between it and a company known as Mitani Limited (Mitani), a company incorporated in Switzerland, later replaced by Mittane. It is alleged that Mitani agreed to provide the services of Dame Kiri to perform at concerts with John Farnham (Mr Farnham), a renowned Australian popular singer, in Sydney on 5 February 2005 and in Melbourne on 12 and 13 February 2005 (the Concerts); and that in breach of that agreement, Mittane refused to provide the services of Dame Kiri to perform at the Concerts. The plaintiff also claims that Dame Kiri warranted that she would perform at the Concerts, and in breach of that warranty failed to perform at the Concerts. The plaintiff also makes a claim for the expenditure it incurred on a quantum meruit basis, although not pleaded, and for restitution in relation to that expenditure based on an equitable estoppel claim. There are also claims against Dame Kiri for breach of s 42 of the Fair Trading Act 1987 (NSW) (FTA) and against NGM and Mittane for breach of s 52 of the Trade Practices Act 1974 (Cth) (TPA), in relation to alleged representations that Dame Kiri would perform at the Concerts. Finally, there are claims against Dame Kiri and Mr Grace that within the meaning of s 75B of the TPA they were knowingly involved respectively in Mittane's and NGM's breaches of s 52 of the TPA.

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3 The plaintiff conceded that it was "difficult" to ascertain the time at which the alleged contract was made in this case (tr 428). It was submitted that such ascertainment was heavily dependent upon a detailed analysis of the communications, both oral and written, between the parties and others during the period June 2003 to April 2004. The majority of that analysis is in any event necessary for the determination of the plaintiff's other claims in estoppel and for misleading or deceptive conduct. In these circumstances it is appropriate to describe the parties and others who were part of or party to those communications and events over that period. The parties and others 4 The directors of the plaintiff are Frank Lee Williams (Mr Williams) and Eileen Rosalind Newbury (Ms Newbury). Mr Williams and Ms Newbury became joint directors of the plaintiff in 2002, when they decided to pursue together the business of promoting events in the entertainment industry. Mr Williams' experience had been mainly in the promotion of golfing events whilst employed as the General Manager of International Management Group (IMG) between 1988 and 1994. From 1994 to 1999 he lived in Florida, USA, working as the personal agent of the Australian champion golfer, Greg Norman. After returning to Australia in 1999 Mr Williams continued to look after Mr Norman's Australian affairs until 2001 and was also a consultant to entities in the golfing industry. Ms Newbury's experience was as an events co-ordinator in the 1980s and early 1990s. In 1996 Ms Newbury commenced operating under the business name "Leading Edge Events", promoting various large events in which she had particular experience with the preparation of budgets and obtaining sponsorships. 5 Whilst Mr Williams was employed at IMG it promoted some of Dame Kiri's concert performances. At that time Mr Williams' role was to source and screen potential performances for Dame Kiri, to negotiate the terms on which she would appear and to liaise with her and her then husband, in relation to the detail of those performances. Mr Williams' evidence was that he "put the deals together", organised sponsorship and ticket sales to the general public, selected and secured venues and supervised the merchandising, advertising and marketing in respect of Dame Kiri's performances. In his role as the General Manager of IMG, Mr Williams was involved in projects for three of Dame Kiri's performances: one at Mitchelton Winery (in Victoria) in 1989; another at the Melbourne Concert Hall in 1990; and a further concert at Werribee Park in Victoria in 1993.

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6 Dame Kiri is a classically trained lyric soprano and has been singing since three years of age. She has been a full time opera singer since 1969 and in 1982 was made a Dame of the British Empire by Her Majesty Queen Elizabeth II. In 1990 Dame Kiri was invested with the Companion Order of Australia and was awarded the Order of New Zealand in the 1995 Queen's Birthday Honours List. Dame Kiri has received numerous honorary degrees and doctorates from universities around the world and is an honorary fellow at the Royal Academy of Music in London and a visiting professor at the Royal College of Music in London. Dame Kiri performs an average of 20-30 concerts around the world every year, including orchestral concerts, piano recitals, charity concerts, private engagements and concerts for the Kiri Te Kanawa Foundation (the Foundation). Dame Kiri's musical director is Julian Reynolds. 7 Dame Kiri spends the majority of her time in the United Kingdom and New Zealand when not performing in other countries. One of her residences is in the Bay of Islands on the north east coast of the north island of New Zealand and is some hours by road from Auckland. Dame Kiri's 60th birthday was on 6 March 2004, and she had planned to celebrate it at a party with guests, some of whom had travelled from other parts of the world, at her Bay of Islands residence on 1 March 2004. That celebration and the arrival of guests prior to it, impacted on the time Dame Kiri had available for a planned meeting with Mr Farnham in Auckland on Sunday 29 February 2004. 8 Dame Kiri was an "employee" of Mitani up to 31 December 2003, and from 1 January 2004 became an "employee" of Mittane. Although Mittane was registered as a private company in Jersey in the Channel Islands on 1 October 2003, it did not commence operations until 1 January 2004. Since that date it has been Dame Kiri's employer in respect of her activities in all parts of the world other than the United Kingdom and the Irish Republic. Dame Kiri is the sole employee of Mittane and is not and never has been a shareholder or director of Mittane. Mittane performs numerous activities including liaising with financial and taxation advisers, musical assistants, musical directors or promoters and others who assist in arranging concerts for Dame Kiri. Andrew Quentin Schofield Green (Mr Green) has been a director of Mittane since 7 October 2003. Mr Neil Grainger of Stellar Financial Partners (Stellar), was described by Dame Kiri as her "financial person in England (tr 338). 9 Mr Grace completed his studies at the Guildhall School of Music and Drama in London in 1981 and then worked as Production Manager for the London City Ballet until 1984 when he started his own production company, NGM, to provide tour, production management and consultancy services. From 1991 to 1993 Mr Grace worked for IMG in London, producing special events for that company. Mr Grace left IMG in 1993 to focus on producing his own projects with NGM. Since then, NGM has produced many successful concerts and musicals. In 2002 Mr Grace created a dance company called "Bounce", referred to as a "streetdance" company, which has toured the UK, Europe and South Africa. Mr Grace is presently the Associate Producer and General Manager of the International Tour of the successful musical "Mamma Mia!". 10 NGM and Mr Grace were contracted to Mitani and another company, Impresario AG, between 1995 and 1998, to provide services to assist their employee, Dame Kiri, in relation to her performances in the United Kingdom. Between 1998 and 31 December 2003 NGM was engaged by Mitani to provide the services of Mr Grace to support and assist Dame Kiri outside of the United Kingdom, such services included: dealing with producers and promoters; acting as Dame Kiri's representative as required; and performing such other functions as Mitani may have reasonably required from time to time. Between 1 January 2004 and 16 November 2005, NGM was engaged by Mittane to provide the services of Mr Grace to support and assist Dame Kiri, pursuant to an agreement for services dated 23 December 2003 between Mittane, NGM and Mr Grace. Those services were to include the same range of services referred to above in the Mitani agreement. NGM and Mr Grace were responsible for finding commercial opportunities to recommend to Mitani, and later to Mittane, for Dame Kiri. NGM and Mr Grace liaised with the directors of those companies about his dealings with producers and promoters on production management issues, in particular the selection and approval of performance venues and orchestras. The respective agreements with Mitani and Mittane provided that nothing in those agreements rendered NGM or Mr Grace an employee, agent or partner of Mitani/Mittane and also provided that NGM and Mr Grace would indemnify Mitani/Mittane for all liabilities resulting from their acts or omissions whilst providing their services (cl 8 & cl 9).

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13 These arrangements were obviously aimed at, inter alia, protecting Dame Kiri from having to deal directly with promoters who wished to secure her agreement for performances. The arrangements were also structured to protect Dame Kiri from having to contract personally with promoters for such performances. It was the companies that employed Dame Kiri (Mitani/Mittane) that entered into those contracts with promoters, in which they promised to procure the performance of their employee at the proposed performances. 14 Mr Farnham, a recipient of the Order of Australia, was not a witness in these proceedings. His career has spanned over thirty years and at the time of the events the subject of this litigation, he was lauded in the promotional material for the Concerts as Australia's top performing artist. He was inducted into the Australian Recording Industry Association (ARIA) Hall of Fame in 2003. Mr Farnham's musical director is Chong Lim. Glenn Dawson Wheatley (Mr Wheatley) is the managing director of Talentworks Pty Ltd (Talentworks), Mr Farnham's manager. Mr Wheatley has been involved in the entertainment industry for forty years and has been involved, personally and later through Talentworks, in the management of Mr Farnham since approximately 1982. In addition to managing Mr Farnham, Talentworks is also a concert promoter and artists' agent and has been involved in the entertainment industry since approximately 1994. 15 Adrian Lloyd Bohm is a concert promoter and theatrical producer who has been promoting concert tours and theatre productions in Australia and New Zealand over the past 26 years. Mr Bohm established the company Adrian Bohm Presents Pty Limited (ABP), of which he is the only director and shareholder, in the late 1980's and it is that company that promotes and produces the concerts and theatre productions. Mr Bohm promoted concerts for Dame Kiri in 2003 and for Mr Farnham in 2004. He also promoted a series of piano recitals for Dame Kiri in June 2006 in Brisbane, Sydney and Melbourne. Notwithstanding his prior involvement with Dame Kiri, no objection was taken to Mr Bohm purporting to give evidence as an expert. Mr Bohm gave some lay evidence of the reasons why Dame Kiri's 2003 concerts, of which ABP was the promoter, were less successful than anticipated (tr 385) to which I will refer later. 16 There are also references, in the communications and events referred to below, to officers of the Sydney Festival, the Botanical Gardens Trust/the Domain and the Werribee Park Mansion in Victoria in respect of the arrangements that were being put in place to secure the Domain and the Werribee Park Mansion, as venues for the Concerts on the planned dates in February 2005.

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Entertainment industry 17 The evidence in this case establishes that the business of promoters operating in the entertainment industry is in many respects like any other entrepreneurial commercial enterprise where commercial risks are taken in the pursuit of profit. However a distinguishing feature of the risk in the entertainment industry is that in many instances there is heavy reliance on the performance of one person to achieve that profit. It is common for the performing artist to be "managed" by an agent with whom the promoter must negotiate and contract for the services of the performer. In this way the commercial matters are left to the agents and/or managers whilst the performer is more focused on creativity. That is not to say that the performer is disinterested in the pursuit of profit. As Dame Kiri admitted in her evidence, sensibly in my view, the fact that a fee may be $50,000 or $200,000 would "make a difference" to a willingness to perform (tr 304). 18 Mr Bohm's evidence provided a little insight into some of the risks for the promoter in the entertainment industry. His evidence was that there are many costs that are incurred in relation to promoting a concert that cannot be recouped until significant amounts of tickets are sold for the concert. He said it is common practice within the concert promotions industry for the performance contract to provide that 50% of the performance fee is to be paid to the artist (or the artist's employer or management company) at the time that the performance contract is signed with the balance being paid just prior to the concert. It is common for that fee to be non-refundable if the concert is cancelled because the ticket sales are not meeting expectations. Mr Bohm also gave evidence that the promoter needs to be able to have the funds available to it to meet such expenses and to take the risk of loss of those funds. He said that a large concert for an established artist, such as one of the concerts that he had promoted at a winery, will cost somewhere between $500,000 and $700,000 in upfront expenses to stage. 19 There was an unsuccessful attempt to elicit evidence from Mr Bohm of a so-called industry practice in relation to the promoter's risk prior to a contract being signed. However Mr Bohm did give evidence that prior to a contract being signed, he limits ABP's expenditure in relation to a proposed concert to no more than $5,000 to $10,000 because he takes the view that he carries the risk prior to that time. That approach seems to me to be commercially sound, however much will depend upon the particular negotiations and the particular contract. 20 The process of determining whether an agreement was reached between the plaintiff and Mittane to procure the services of its employee, Dame Kiri, to perform at the Concerts, has not been assisted by the plaintiff's approach at trial. I will make further reference to that approach later, but at this stage I merely record that it has made it necessary to adopt the following rather lengthy recitation of the detail of the events and communications between the parties between June 2003 and June 2004. The first period is between June 2003 and December 2003, during which it is alleged that agreement had been reached between the plaintiff and Mittane. The second period is between January 2004 and June 2004 during which the plaintiff relies upon the events and communications in support of its claim that a contract was entered into in December 2003. The plaintiff also relies upon the events and communications in both periods in support of its equitable estoppel case and its claims of misleading or deceptive conduct. June 2003 to December 2003 21 It was in 2003 that Mr Williams had the idea of replicating the 1993 Werribee Park concert. In June 2003 he made contact with Paul Gleeson in New Zealand to find out how to contact Dame Kiri. On 18 June 2003 Mr Williams wrote to Dame Kiri, via Mr Gleeson, in the following terms: Long time no speak - trust you are well!

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11.6 The terms of this Agreement may only be amended in writing signed by both parties. 36 On 16 July 2003 Mr Williams sent the following email to Mr Grace: We have now visited the various sites for Kiri's concerts, they are Werribee Park, Melbourne and Southern Highland Winery, Sydney. We believe the dates of the 5th Feb and 12th Feb 2005 would be ideal for our purposes. We have also contacted Kel McMillan of the Australian Philharmonic who we have both used on various occasions. Will you now prepare contracts for the above dates and add a proviso that Kiri will not be performing in Australia in 2004. Our research tells us that the last concert ticket sales were disappointing. Was this due to poor promotion, lack of sponsors or to ( sic ) short a lead up time or what? Can you confirm numbers sold. This will not affect the deal. I just want to see where they went wrong. Your input would be appreciated. I am confident that with a long lead up time and sponsorship support we will do very well. But I also believe that a Kiri concert prior in Australia would be too soon and damaging to the 2005 concerts. 37 Mr Grace had advised Mr Williams that one reservation that both he and Dame Kiri had about performing in Australia again, was that the concerts promoted by Mr Bohm's company ABP in early 2003 were not very successful. Mr Williams claimed that in a conversation with Dame Kiri in July 2003, Dame Kiri advised him that her last experience in Australia was not a good one and that she and Mr Grace had said that it was the last time that she would tour Australia. In cross-examination, Dame Kiri agreed that she had a telephone conversation with Mr Williams in about July 2003, and gave evidence that the "reservations" about returning to Australia at that time which were "not musical". Although Dame Kiri could not recall informing Mr Williams that her last experience in Australia was not a good one, she recalled saying words to the effect of "I don't think I need to go back there" (tr 304). 38 On 16 July 2003 Mr Gleeson wrote by email to Mr Williams asking him to ensure that future messages were copied to him directly saving Mr Grace from the need to forward them to him. Mr Gleeson advised that Dame Kiri's concerts in 2003 had been produced by Mr Bohm in the Hunter Valley, Tandunda in the Barossa Valley and the Myer Music Bowl in Melbourne; and expressed some opinions as to why the ticket sales were not up to expectations. 39 On 18 July 2003 Mr Williams wrote to Mr Grace in the following terms: I have been doing some research re Kiri's last concerts in Australia and the following has come to light.

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Gleeson: Ok. 55 On 24 September 2003 Mr Wheatley sent an email to Mr Williams stating "We are in!". On 30 September 2003 Mr Grace sent an email to Mr Williams advising that he was pleased to confirm that Dame Kiri "would be happy to work with Orchestra Victoria for both engagements". Mr Grace also advised that he was looking forward to receiving the draft budgets. On the same day Mr Williams sent an email to Mr Grace in the following terms: Everything progressing well, Farnham now confirmed in writing venues looking good. John and Glen; now working out possible programme and song suggestions two that I personally think could be appropriate would be Simply the Best (Tina Turner song) and for establishing rapport Anything you can do. (Annie Oakley). just suggestions from a layman who cant sing a note. I have asked Glen to send KiriDVD of Johns last concert (75,000 sold to date) can u give me an address to send. The deal I have struck with Farnhams company that this will be a joint production between Leading Edge Events (me) and Talent Works (Glen Wheatley) with guarantees of $200,000 per performance for Kiri and John. Then I will split 50/50 profits with Kiri and Glen will do the same with John. I will send budgets withinthe next week or so the bottom line is looking really good especially if we sell all the corporate sponsorships. There are also revenue streams that I am working on with Glen that at this time are not in the budget. ie. event cable television, memorabilia etc. Glen has asked who is Kiris recording company and thinking of a possible record prior to xmas 2004. John is with BMG and believes they would jump at the chance to record with both artists. How does Kiri feel about a third concert in WA or QLD we are currently looking for suitable sites in these areas. If you would like to draft a suitable contract based on what we have discussed please do so. I will keep you updated as and when things develop. 56 On 1 October 2003 Megan Smith, an employee of the plaintiff, sent a draft budget to Mr Grace. That email advised Mr Grace that the budget was in draft, but that it would give him an indication of "expected revenue". Ms Smith also advised that she had organised for the requested DVD to be sent to his office. The draft budget included a performance fee for Dame Kiri and Mr Farnham of $200,000 per concert "guaranteed against profits". It also included an amount for "Administration" of $100,000 and an amount for "Project Management" of $200,000 for each concert. The administration amount was to be paid to Talentworks and the project management amount was to be paid to the plaintiff. Mr Williams was cross-examined about these two amounts and it was suggested to him that he did not inform Mr Grace or Dame Kiri that those amounts were to be paid respectively to Talentworks and to the plaintiff. Mr Williams agreed that he did not identify the recipients of the payments but it seems to me that such an omission does not have a significant impact on the outcome of this case. It would have been obvious to any commercial operator that the administration/project management amount would have to paid to the entity or entities administering and/or managing the project. 57 Mr Gleeson was provided with copies of emails between the plaintiff and Mr Grace in which draft budgets were forwarded to NGM and Mr Grace. On 12 October 2003, Mr Gleeson sent an email to Mr Grace with his comments on the draft budget. Those comments related to 15 matters. Mr Gleeson suggested that the budget did not contain costs for accommodation and air fares of the two other people travelling with Dame Kiri. He suggested that there would be an additional $6,000 per concert in relation to power connections and an additional $4,000 per venue for catering for the crew. He highlighted the fact that there had been no reference to backstage facilities for the conductor, orchestra, etc., and that the autocue seemed too cheap and could be closer to $5,000. Mr Gleeson also made similar observations in relation to generators, lighting, plant hire, the Superscreen and the merchandise. He also noted his presumption that the production/management/admin figure was the equivalent of a facilitation fee and if so, expressed the view that it was "high". He observed that there was no reference to per diems for the conductor and the sound engineer, and there was no reference to travel required for the sound engineer. He also suggested that there could be an additional cost of at least $15,000 for fencing barriers and that there had been no reference to deductions from income for credit card and GST charges. Notwithstanding all of this detail, Mr Gleeson gave evidence that he did not review the draft budget "in great detail" but only with a view to providing his comments "on the most obvious matters" which occurred to him as he read it. Although Mr Gleeson may analyse budgets in far more depth than this analysis it was still a rather detailed response. 58 On 18 October 2003 Mr Williams sent an email to Mr Grace in the following terms: Everything proceeding on schedule we are in the process of refineing the budgets obviously there are some additional costings associated with "John ie his band etc". How is the contract progressing? When can I expect to receive? Also can u give an indication if Kiri is free to do a joint recording for John for release late next year. Or if in fact she wants to do anything else with him. He is by far the biggest entertainer from Australia. From the feedback Im getting from market research these special events are going to be highly successful. Give Kiri my best I will be in touch again soon with updates. We are having budget meetings with Talent Works this week and drawing up time lines for all concerned parties. 59 On 20 October 2005 Mr Grace wrote to Mr Williams by email apologising for taking so long to come back to him with the comments on the budget. Mr Grace made the following comments, quite a deal of which appeared to incorporate Mr Gleeson's suggestions: KTK [Dame Kiri] Hotels - as you know, Kiri always travel with two people - budget needs suite (Kiri) plus 2 executive singles.

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PS. Can you please forward the draft contract as soon as possible including the 2 concerts in Melb and Syd. We would like to get contracts finalised asap. 70 On 8 December 2003 Mr Grace wrote by email to Mr Grainger at Stellar attaching a copy of a form of contract referred to as his "draft for Australia" (the Mittane Letter) and stated that he was "basically happy" with it. He asked Mr Grainger to let him know if there were any comments that he may have in relation to it, and advised him not to worry about the schedules "too much", noting that he needed to send it to Mr Williams that week. Mr Grainger responded promptly to Mr Grace providing to him handwritten notations. 71 Mr Grace had also forwarded a copy of the Mittane Letter to Mr Gleeson by email on 7 December 2003, asking him to let him know whether he thought it was "ok". On 8 December 2003, Mr Gleeson responded by email advising that it looked "excellent (very thorough)", and made only three comments on minor matters. 72 Dame Kiri gave evidence that on 24 November 2003 she viewed the DVD of one of Mr Farnham's performances and observed that he had a very relaxed conversational style that was of some concern, because her performances of classical pieces do not lend themselves to continuous dialogue with the audience. Worse still, she observed that women's lingerie was thrown on to the stage and Mr Farnham collected it and held it during the performance, she thought, as some sort of "trophy". Dame Kiri claimed that she found that "embarrassing" and "disrespectful" to her (tr 313-314). In addition Dame Kiri had previously appeared with a pop singer in a concert that was an "uncomfortable" experience, and she was concerned not to repeat that experience. 73 It was not until 9 December 2003 that Dame Kiri raised this matter with Mr Grace, when they were both staying in the same hotel in Norwich in relation to one of her concerts. Mr Grace gave evidence that after informing him about her observations of the DVD, Dame Kiri said: "I would never want to be part of that kind of entertainment". Mr Grace suggested that Dame Kiri telephone Mr Williams and "let him know about your concerns and seek some reassurance". Dame Kiri then telephoned Mr Williams in Mr Grace's presence. Dame Kiri claimed that the following conversation took place: Dame Kiri: Frank, this is Kiri. I'm very concerned. I've watched the DVDs of John Farnham. They're absolutely horrendous. Undies were being thrown at him. He talks endlessly and it's not even funny.

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Transport and Accommodation The Promoter will provide the following in connection with the Concerts:- (i) the cash equivalent (within seven days of receipt of invoice from Mittane) of London/Australia/London first-class air travel for two people and business class air travel for one person; (ii) Auckland/Australia/Auckland business class air travel for one person {"Paul Gleeson"}; (iii) domestic business class travel within Australia as required for four people, the exact itinerary to be subject to agreement with Mittane; (iv) hotel accommodation in the form of four (4) first class rooms (including all meals) as required in connection with rehearsals and the Concerts; (v) local limousine transfers for KTK and her party as required during the rehearsal periods and at the Concert venues. 11. Recordings The fees referred to in clauses 6 and 7 shall include the right for the Promoter to make a television recording of one of the Concerts. Neither party shall arrange or permit any other radio, television or other broadcast or recording or still photographs of the Concerts, rehearsals or otherwise without the prior written consent of the other. In respect of any recoding of the Concerts for the purpose of a television broadcast, the Promoter shall ensure that: (a) Promoter has the right to broadcast two (2) deferred broadcast, within Australia only. The recording shall not be broadcast live. No broadcast will commence sooner than 24 hours after the final concert; (b) the recording will be the sole responsibility of Promoter and shall be carried out according to first class technical standards. Make-up staff if required will be supplied by Promoter; (c) the recording shall not be broadcast unless and until Mittane's approval of the final edit has been obtained (such approval not be unreasonably withheld or delayed); (d) the Concerts will be broadcast in their entirety and the order of the programme for the Concerts shall not be changed for the purposes of such broadcast unless mutually agreed in writing by both parties. (e) camera positions shall be approved in advance by Mittane (such approval not to be unreasonably withheld or delayed). There will be no moving cameras without Mittane's approval; (f) the recording shall not be publicly announced prior to the Concerts dates, or without Mittane's approval; (g) Promoter is responsible for, and shall pay, all costs associated with production of the recording, and for clearance of all rights, for all parties involved with the Concerts. This Agreement pertains to the rights and approval of KTK only. Promoter is liable for paying the applicable fees to the national collecting society for composer rights in connection with the broadcasts; (h) Copyright in the recoding shall vest with Mittane, provided that any exploitation thereof shall be subject to this Agreement; (i) Promoter will supply to Mittane two Beta quality tapes of the entire television recording and Mittane retains the right to use short extracts of the recording for use in worldwide promotion of KTK for an unlimited period, at no cost; (j) Promoter shall have no audio rights (that is, the right to release the recording as audio and/or video recordings on record or tape or any other forms whatsoever) or any other rights whatsoever to the recording.

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Optional Concert: Sunday 13th February 2005 Werribee Park, Melbourne 80 Schedule B was the "Contract Rider" for the provision of Dame Kiri's services. It included fine detail in relation to Dame Kiri's requirements in relation to rehearsals, the pitch to which the orchestra should tune for concerts, the direction from which Dame Kiri would approach stage position, dressing room facilities, publicity, transport and hotels. The "Musical Programme" section of the Rider recorded that Mittane would have the final decision on the programme to be performed and would "endeavour to provide the final programme no later than four weeks before the engagement". There were also clauses dealing with Dame Kiri's "special requirements" which descended into even finer detail. Schedule C set out "Minimum requirements" for the Strings and Rhythm sections for the Orchestra Line Up. Schedule D merely recorded the words "John Farnham Band Line-up". Although clause 8.2 of the Mittane Letter referred to the budget in Schedule E, it was not attached. 81 On 17 December 2003 Mr Gleeson wrote to Mr Grace informing him of his visit to the Domain and advising that it was "beautiful and quite large". He advised Mr Grace that the venue was used every summer for the Sydney Festival and that Mr Williams had negotiated for the stage and infrastructure to be left up for the Concerts in February. 82 In the meantime Ms Newbury was preparing the promotional material for the sponsors' launch that was to occur in early 2004. The material included a champagne flute with Dame Kiri's and Mr Farnham's names frosted onto it in an attractive box, on which their names as well as the words "Two Great Voices" were printed. On 17 December 2003, Ms Newbury wrote by email to Mr Williams enclosing a production schedule for printing requirements. That email included the following: As you can see no way can we have a signoff if we are waiting on John and Kiri to approve. Mittane contract says they have approval on everything before going to print. 83 Mr Williams' response that afternoon was as follows: Although they have to sign off the only things they can object to would be photographic image and as they have provided these from stuff used in the past their [ sic ] will not be a problem. Just to be on the safe side as we receive things from the graphic designers send them over by email with a turnaround of 72hours and if permission not received by 72 hrs assumption is that everything is ok. This is what Ive done in the past and is acceptable. 84 The plaintiff subsequently gave instructions to the designers to commence work on the brochures for the promotion of the Concerts. 85 On 19 December 2003 Ms Newbury forwarded to Mr Grace and Talentworks what she referred to as the "conceptual visuals and 'invitation to attend launch' letter for the Dame Kiri John Farnham events". Ms Newbury's email included the following: Explanation of visuals as follows:

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These ground-breaking concerts will be a once in a life-time experience. Prior to the concerts, your corporate guests can indulge in the finest cuisine complemented by award winning wines. In Sydney, your guests will enjoy the open spaces of a truly magnificent park 'the people's Domain. In Melbourne, guests will enjoy the rich surroundings plush with antiques, chandeliers and fine art, and the feel of stepping back into time. 88 The document described the venues in more detail and then invited the recipient to join "with other discerning corporations" to make a selection from various sponsorship packages. There was also reference to the backgrounds of Dame Kiri and Mr Farnham and a description of "Sponsorship Opportunities". There was also a draft invitation to the launch of the Concerts to be signed by Dame Kiri and Mr Farnham. 89 On 22 December 2003 Ms Newbury wrote by email to Mr Grace and to Mr Wheatley advising that the plaintiff was giving consideration to using song titles as the names for sponsorship packages and requested assistance in coming up with suitable titles for Dame Kiri. 90 By this stage Ms Newbury had consulted with the plaintiff's solicitor in relation to the Mittane Letter that was forwarded by Mr Grace on 16 December 2003. On 22 December 2003, the plaintiff's solicitor forwarded to Ms Newbury the "Agreement amended in accordance with" their discussions. The amendments: introduced Talentworks as a joint contracting party with the plaintiff with the consequential amendment of the word "Promoter" to "Promoters" throughout the Letter; changed "Victoria State Opera Orchestra" to "Orchestra Victoria" in clause 1.2(b); deleted the reference to the "Optional Concert for Melbourne" in clauses 5 and 7; deleted the requirement for the irrevocable letter of credit in clauses 6 and 7; deleted clause 9.5 which provided for the payment of the Performance Fee "in any circumstances" other than those referred to in the clause; deleted clause 10(ii) which required the Promoters to pay for Mr Gleeson's return business class airfare from Auckland to Melbourne; made numerous amendments to clause 11 in relation to recordings; removed Mittane's right to approve sponsors in clause 12 and introduced the Promoters' agreement that the proposed sponsors would "be of a quality suitable to the event"; and introduced a requirement into clause 17.2 that Dame Kiri "confirms the foregoing by her signature to this agreement". The amendments to Schedule A deleted the reference to the Botanical Gardens and inserted The Domain. The clause dealing with the Musical Programme in Schedule B was amended to give Mr Farnham a joint entitlement with Mittane to make the final decision on the programme to be performed.

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I look forward to receiving your comments to the draft agreement w/c 19 January and finalising by the end of the week. 97 Mr Grace denied that the conversation referred to in paragraph 94 above occurred in the terms as claimed by Mr Williams. Having regard to the terms of Mr Grace's email of 6 January 2004 and also his later email of 10 February 2004 referred to below, it is difficult to accept that a conversation in these terms did occur. The note in the email of 10 February 2004 suggests that was the first time that Mr Grace had responded to any enquiry in relation to the irrevocable letter of credit. 98 On 11 January 2004 Mr Gleeson received an email from a Mr Bouffler in which he confirmed that he would be "delighted" to act as Mitani's accountant in Australia for the "upcoming Tour" with John Farnham. Mr Bouffler advised that the services would be similar to those provided on Dame Kiri's previous wineries tours with Mr Bohm. On receipt of that email Mr Gleeson forwarded it to Mr Grace. 99 On 12 January 2004 Ms Newbury forwarded a revised budget for the "Dame Kiri and John Farnham events" to Mr Grace and Mr Wheatley. This budget suggested a profit for three concerts of $3,395,610. On 14 January 2004, Ms Newbury wrote to Mr Grace and Mr Wheatley by email enclosing an image of Dame Kiri and Mr Farnham "for the sponsorship satchels for approval". That email advised, "If we do not hear back within 48 hours, we will need to go ahead and approve so that we can make our printing deadline". 100 On 15 January 2004 Mr Grace responded to Ms Newbury's email of 14 January 2004 in the following terms: I'm afraid I cannot get approval from Kiri within 48 hours. I know she won't be particularly happy with this image of her (its rather unflattering), but given that we don't have any other performance images to give you, I would like to suggest that you use the very similar shot of Kiri which you have used on the champagne box material. This is a more flattering facial expression, and we could approve it.

[204]

Please also note that any new artwork needs 4-5 days to get approval. 106 On 22 January 2004 Megan Smith sent an email to Mr Grace confirming that the launch of the "Dame Kiri/John Farnham Concert" was to be held in Melbourne on Tuesday 9 March 2004. She also confirmed that Mr Farnham was able to meet with Dame Kiri on Sunday 29 February 2004 between 12:30pm and 1:30pm at the Auckland Airport Hotel. She thanked Mr Grace for faxing through Dame Kiri's signature and asked him to note that the plaintiff would be sending some artwork through in the next couple of days for him to look at. On 22 January 2004, Megan Smith forwarded to Mr Grace the artwork for the sponsorship folder/satchel. 107 On 23 January 2004 Mr Grace wrote by email to Ms Smith requesting advice as to whether the launch was only in Melbourne and how much of Dame Kiri's time would be needed. Mr Grace advised that he was going to look into the possibility of changing Dame Kiri's flights, and referred to the fact that Dame Kiri had a very inflexible deal with Singapore Airlines. Mr Grace also advised that he would inform Mr Gleeson of the meeting on 29 February 2004 in Auckland and that he would ask Mr Gleeson to confirm it with Dame Kiri directly. On 24 January 2004, Mr Grace sent the following email to Ms Smith: Thanks for sending the artwork. This seems fine to us. 108 On 24 January 2004 Mr Grace wrote to Paul Gleeson by email in the following terms: When you discuss the possibility of the John Farnham meeting with Kiri, please don't mention the proposed launch in Melbourne on 9th March. This still needs to be thrashed out with Leading Edge, and I'll have to speak to Kiri about it myself next week. 109 On 27 January 2004 Mr Grace sent an email to Ms Smith requesting that she urgently advise of the details of the launch in Melbourne because it was not possible to look into changing Dame Kiri's ticket without more information. 110 On 27 January 2004 Mr Gleeson wrote by email to Mr Grace advising that he had spoken with Dame Kiri about the meeting on 29 February 2004 and that "she accepts that a meeting is a good idea". Mr Gleeson advised Mr Grace that no mention had been made of the 9 March 2004 announcement and that Dame Kiri had advised him that she was leaving New Zealand on 8 March 2004. On 28 January 2004, Ms Newbury advised Mr Grace of the detail of the launch at Werribee Park on 9 March 2004 between 10:00am and 11:30am. 111 On 29 January 2004 Ms Smith wrote to Mr Grace by email in the following terms: Eileen has asked me to send through to you the Dame Kiri contract. You will see that we have attached two copies. One tracks our changes in red and the other copy has the changes already made. Not sure which is the easiest for you to look at. Please note that this contract will be the same for John Farnham with changes to the rider etc.

[243]

Williams: Agreed. 137 Mr Grace claimed that other issues regarding the contract were then discussed and Mr Williams then provided some sample artwork and sponsorship packages to him, and suggested that Mr Grace give them to Dame Kiri. Mr Grace suggested it would be better and more appropriate for Mr Williams to present them to Dame Kiri when they met on Sunday. He suggested that Mr Williams should talk Dame Kiri through the sample artwork and sponsorship packages and explain to her what was to happen at the launch in Melbourne. Mr Grace claimed that Mr Williams agreed to this. 138 Mr Gleeson's recollection of what occurred at the first meeting, which he fixed at the Carlton Hotel on 27 February 2004, was that when Mr Williams showed the artwork and promotional material he said that they would be given away as part of the sponsorship launch in Melbourne. Mr Gleeson claimed that Mr Grace said that he would show them to Dame Kiri but that Mr Williams claimed that he did not want that to happen because he wanted to "surprise" Dame Kiri on Sunday when they met. Mr Gleeson claimed that it was in mid-February that he became aware that the focus of the launch had changed to become a sponsorship launch as opposed to a press conference; however, he claimed he still thought it was a press conference just under a different name. 139 Mr Gleeson's recollection of the conversation at the first meeting in relation to the irrevocable letter of credit was as follows: Grace: The payment to Mittane under the contract has to be secured by an irrevocable letter of credit. Williams: We can't make it happen. There's no way. We've got to renegotiate that. Grace: I can't renegotiate that. That's all set down by Mittane. 140 Mr Gleeson's evidence was that he left the meeting after the discussion in relation to the irrevocable letter of credit and when he saw Mr Grace at the dress rehearsal for the gala concert that evening Mr Grace informed him that Mr Williams refused to provide the irrevocable letter of credit.

[281]

Q. So, even when you were at the Bay of Islands, you didn't know that there had been a sponsorship launch organised for 9 March and that this was, in fact, an invitation to a prospective sponsor to attend at the launch? A. I did not look at it. 152 Mr Grace gave evidence that on the evening of 29 February 2004, Dame Kiri telephoned him and advised him that she had made up her mind not to go to the launch. When Mr Grace asked Dame Kiri why that was, she said that she was "disappointed" that Mr Farnham did not "make the effort to make it to the meeting"; and that she did not want to go to Melbourne and be asked what they would be singing, when there was no agreement between herself and Mr Farnham on a programme. Mr Grace advised Dame Kiri that he thought that this would be a "huge problem" for Mr Williams, and asked her whether she was saying that she wanted to cancel the Concerts. Dame Kiri advised Mr Grace that she was not saying that she wanted to cancel the Concerts, but that she wanted to postpone the launch to a later date when an artistic programme had been worked out. Mr Grace reiterated that such a postponement would put Mr Williams in a difficult position, and it could jeopardise the whole project because he did not think Mr Williams would be able to get the same sponsors back for a second time. Dame Kiri was not persuaded, and requested Mr Grace to ask Mr Williams to postpone the launch. 153 On 1 March 2004 Mr Gleeson sent the following email to Mr Grace: I spoke to Kiri as soon as I arrived last night. She told me (what she'd obviously told you) that she had changed her travel plans and would not be going to Melbourne - for all the reasons we have previously discussed. I told her I thought that was a mistake and what Frank had said about being unable to stop/postpone the launch. She said she knew she was 'in the s..t' with Frank but she had to follow her 'gut instinct' and that until she knew what sort of programme might be possible there was no point attending the launch. We agreed nothing could change her mind at this stage.

[318]

· Negotiations commenced on 18th June, 2003 for Kiri Te Kanawa concerts · Agreement reached and financial offer accepted by email on 8th July with Nick Grace Management. Offer accepted - a joint venture agreement between Leading Edge Events and Dame Kiri Te Kanawa, equally sharing net profits, with a guaranteed performance fee of $A200,000 per concert. · Orchestra sought and submitted for approval. 17th July, 2003, advised by Dame Kiri that she did not want the Philharmonic Orchestra and other options were sourced. Orchestra Victoria given approval by Kiri and her management. · Verbal discussions between Frank Williams, Leading Edge Events and Nick Grace Management re joint concerts with John Farnham and Dame Kiri - August 2003 · Advice from Nick Grace via email - very interested in possibility of Dame Kiri and John Farnham also doing a joint recording prior to concerts as well as the concerts in February 2005. - Advised letter of intent to be sent from Mitani - 22nd August, 2003 · Advised Nick Grace that John Farnham has agreed to concerts with guarantees of $A200,000 each concert - 24th September, 2003 · Draft budgets and John Farnham DVD's sent to Nick Grace - 3rd October 2003 · Some clarification comments re budget made by Nick Grace - otherwise all OK. 20th October, 2003 · Updated promotional material requested by Nick Grace - Sent via email to Nick on 22nd October, 2003 · Nick Grace advised we needed to go with photos we had for Kiri for promotional material as they did not any up to date photos and Kiri needed to do a new photo shoot. This will be done in time for the programme for the John Farnham/Dame Kiri concerts in February - Email 23rd October, 2003. · Nick Grace informed us that he had spoken to Kiri and she was happy to consider a second concert in Melbourne if demand for ticket sales was there. Kiri also invited John to take part in her Foundation Launch concert in New Zealand - Email date 7th November, 2003 · Venues sought and approved between all parties. Site inspection occurred by local Kiri Te Kanawa agent - Paul Gleeson on 12th December. · Agreements were put in place with the Sydney Festival to utilise existing stage and lighting facilities at the Sydney venue early December 2003. · Catering contractor appointed December, 2003 · Agreements with both The Domain and Werribee Park venues negotiated and signed. · Nick Grace emailed first draft of contract - 16th December, 2003 · Marketing and sales brochure concepts including visuals, photos and copy prepared and approved for sponsorship, media and general parties forwarded to Nick Grace Management on 19th December 2003 for approval. Approval for concepts received on 16th January, 2004. Copy for Invitation Letter to the Launch signed by both artists - approved and signatures received for insertion in letter on 16th January, 2004. · All final artwork approved 24th January, 2004 by Nick Grace Management on behalf of Kiri Te Kanawa · Event Bank account opened in January 2004 and $A200,000 deposited for initial launch and event expenses. · Additional Sales and administration staff employed January, 2004. · Television agreement obtained on 27th January 2004 · Invitation to Launch and Marketing and sales proposals couriered and mailed to 600 companies throughout Australia on 9th February, 2004. · Sponsor/Media Launch date postponed at the specific request of Dame Kiri Te Kanawa on 4th March, 2004. (Launch date 9th March, 2004) · Sales Force continuing to sign sponsorship agreements with corporate Australia (current) · Various concert suppliers contracted. · Venue hotel - Werribee Mansion Hotel - booked all rooms and deposits committed.

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Gleeson: I have no idea. 180 Although Mr Wheatley admitted that he had a conversation with Mr Gleeson at this time, he denied that it occurred as Mr Gleeson claimed. Mr Wheatley claimed that it was Mr Gleeson who said that he could not understand why Mr Williams would incur such expenditure without a signed agreement and that it was "unusual". Mr Wheatley claimed that in response to that suggestion he said that it was not unusual and that this happens in the business "all the time" (tr 265). Mr Wheatley referred in his evidence to that fact that Tom Jones did not sign his contract until after he left the country (tr 265). He also made the point earlier in his evidence that in the 25 years he has been managing Mr Farnham he has not had a written contract (tr 247). Whether it was Mr Gleeson or Mr Wheatley who made the observation about the lack of a written agreement is not going to matter in the determination of whether there was a binding agreement between the plaintiff and Mittane as pleaded. However the conversation does evidence the obvious lack of real explanation for the cessation of negotiations by Mittane and the uncertainty as to whether there was a prospect of reviving them. 181 Mr Gleeson also gave evidence that he had a conversation with Mr Williams in mid April 2005, in which he said words to the effect: I think the concerts are beyond redemption. I'm not sure of all the reasons but the programme issue is a major one. Nick and I are still trying to resolve the issue. 182 Mr Gleeson gave evidence that during one of the conversations in mid-April, after Mr Williams referred to the fact that he had spent 20 years building his reputation up, he informed Mr Williams that, "Nick's told her you have spent quite a bit of money". 183 On 16 April 2004, Mr Williams telephoned Mr Grace and asked him what was going on. Mr Grace advised Mr Williams that nothing had changed since Mittane's last letter to him. During that conversation Mr Williams informed Mr Grace that he did not accept that situation and that he may be forced into legal action. There was also unresolved discussion in relation to whether Dame Kiri had advised another person in the industry, James Erskine of IMG, that she would not be performing at the Concerts some weeks before Mittane wrote to the plaintiff notifying it of the cessation of negotiations.

[329]

We regret that we do not intend to proceed further with the proposal but may we wish you every success should you chose to proceed with the Farnham Organisation. 185 On 3 May 2004, Mr Gleeson wrote to Mr Grace by email, reporting to him on two "interesting developments today on the Australian situation". Mr Gleeson advised that Mr Wheatley had telephoned him to ask him what was going on, and Mr Wheatley had said that he had spoken with Dame Kiri on the telephone the previous evening in London, and that she had informed him that the main reason she could not do the Concerts was because there was no programme. The email continued: She also spoke about the knickers on the stage scenario! Glen said he got no closer to what was going on and was calling me to see what he'd missed. He said that Frank had been telling him for months that everything had been agreed. He also said that John Farnham was spitting tax ( sic ) about it. Later in the day Kiri called to say that Frank had called her and they spoke for over an hour. It was a very friendly conversation after the first 10 minutes. Kiri said she told Frank that it would be foolish to think about taking legal action etc and asked why he'd even suggested that - he told her it was an automatic response from a difficult situation. She told him she had not seen or spoken to James since before the Gala Concert. Bottom line is that Frank is finding someone else to replace Kiri and needs a reasonable excuse to feed to the public/sponsors. Kiri agreed you and I would come up with something. Frank suggested 'for personal reasons' which Kiri declined. You and I need to come up with something along the lines of - blame it on a musical problem - e.g. she has been preparing for another project which vocally would have prevented her participating in the Australian concerts AT THAT TIME - in other words leave the door open to the thought that she might consider doing it at some other undefined time. Can we discuss tonight? Whatever we decide Kiri wants to see it first. 186 In the following months up to June 2004, Mr Williams attempted to secure a replacement for Dame Kiri and decided that until it was "certain" that Dame Kiri would not perform at the Concerts and/or until it was certain that a suitable replacement for Dame Kiri could not be found, the plaintiff would not make any announcement about the Concerts. That plan was not acceptable to Mr Wheatley, who wrote the following email to Mr Williams and Ms Newbury on 19 June 2004: I have just seen your website for the first time, and I think it is very dangerous to leave the Dame Kiri/John Farnham info up for all the world to see. If John sees this he will not be happy. I think you have also given far too much info out on this site. Those figures we are asking for were for Chief executives only. Anybody can access this site, and I am decidedly uncomfortable for the world to see what we are asking for naming rights sponsor etc. This is fantastic reading for the tabloids, and I think we have been extremely lucky to have gotten away with this not getting to the general marketplace. If I had known you were going to put this much information up, I would have strongly opposed it from the word go. I really want to pull this down now. This show is never going to happen because it is wrong and probably breaking every rule with the ACCC. The reference to Kiri must come down on Monday. 187 Counsel for Dame Kiri and Mittane suggested to Mr Wheatley in cross-examination that this email demonstrated that he was always of the view that the Concerts were "wrong" and were never going to happen (tr 254-255). I am not persuaded that this was Mr Wheatley's view. Although the email is worded a little ambiguously, I am satisfied that what Mr Wheatley was intending to convey was that it was "wrong" to continue publication of the website when it was clear to him at this time that the Concerts were never going to happen.

[337]

3.1.3 Mittane repudiated the contract by its facsimile letter dated 30 March 2004 informing the plaintiff that it was ceasing negotiations and no longer holding the availability for [Dame Kiri's] services. 192 The plaintiff claimed that its loss and damage is $600,000 for the agreed management fee; plus $147,349.26 for expenses and wages plus a one-quarter share of the net profits from the Concerts. The plaintiff also made an alternative claim that it suffered the loss of opportunity to receive the agreed management fee and share of the net profits of the Concerts. 193 In oral opening submissions on the first day of the trial, counsel for the plaintiff informed the Court that it was the plaintiff's case that an agreement was actually entered into in December 2003 and that the Mittane Letter attached to the email of 16 December 2003 "encapsulated the terms that had been agreed" (tr 3). In closing submissions counsel for the plaintiff relied upon a Schedule (Ex Z) that listed over 70 documents in the Court Book as evidencing "conduct going to proving a binding contract". Documents in the Court Book additional to those in the Schedule were also relied upon during final oral submissions. 194 The plaintiff claims that immediately prior to the receipt of the Mittane letter on 16 December 2003, there was an "oral agreement" on foot, evidenced by emails that provided for every contingency and every exigency that would be required under the contract. It was submitted that the parties had intended to be bound by the terms of the oral agreement, and in due course sign a letter setting out the terms that had been agreed. The following exchange took place in final submissions (tr 427-428): HER HONOUR: I would be assisted by you telling me where I find the formation of a contract in the documentary material. I know you have given me a schedule, but if it is truly propounded, on behalf of the plaintiff, that in these volumes of the Court Book there was in fact a meeting of minds of the relevant parties and an agreement, I would be assisted by the excursion very much.

[339]

Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in a relationship may by reason of the parties' subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed. 196 The plaintiff claimed that in the present case the parties had been in negotiation and had reached agreement upon terms of a contractual nature, and had also agreed that their negotiation would be dealt with by way of a formal contract. It was submitted that this is a case that belongs to the first class in Masters v Cameron (1954) 91 CLR 353, described by Dixon CJ, McTiernan and Kitto JJ at 360 as "one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect". The plaintiff claimed that its acceptance of Mittane as the new contracting party "novated the Mitani contract to Mittane", and there was a binding contract whether or not the Mittane Letter was signed. It was also submitted in final oral submissions that the irrevocable letter of credit clauses in the Mittane Letter were additional terms to those that had been agreed between the plaintiff and Mitani and that the plaintiff, through Mr Williams, requested that these additional terms be renegotiated. It was submitted that the plaintiff's preference was to have a provision for payment by way of instalments and that those terms "would replace the letter of credit terms" (tr 427). 197 The defendants submitted that where the communications between the parties were in writing (as was predominantly the case here, principally in the form of email correspondence) the question of their intention is, prima facie, to be resolved objectively and as a matter of construction of the relevant documents (Australian Broadcasting Corp v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 per Gleeson CJ, with whom Hope and Mahoney JJA agreed, at 549, applying: Sinclair Scott & Co Ltd v Naughton (1929) 43 CLR 310 at 317; Masters v Cameron (1954) 91 CLR 353, at 362; Gissing v Gissing [1971] AC 886 per Lord Diplock at 906; and Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441 per Lord Diplock at 502). 198 Counsel for Dame Kiri and Mittane submitted that this is not a case in which the Mittane Letter merely reflected the terms and conditions to which the parties had already agreed. It was submitted that the plaintiff sought numerous detailed changes to the Mittane Letter, after it consulted Talentworks in late January 2004. The defendants highlighted the fact that Talentworks was not even a party to the Mittane Letter when it was sent to the plaintiff in December 2003. It was submitted that even at the meeting in Auckland no agreement was reached on the issues of: (a) the irrevocable letters of credit (a matter about which Mr Grace was going to revert to Mittane); and (b) whether Dame Kiri would sign an inducement or "side" letter (also a matter which Mr Grace was going to discuss with Mittane). The defendants also emphasised the fact that Talentworks is not a party to the proceedings.

[340]

199 The plaintiff relied upon the conduct of the parties after December 2003 in support of its claim that an agreement had been reached in December 2003: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 per Heydon JA at 164 [26]. The first matter relied upon in this regard was the claim that Dame Kiri participated in the organisation of a "sponsorship launch" for the Concerts at Werribee Park, on 9 March 2004. There is no doubt that plans were being made for Dame Kiri to attend the sponsorship launch in Melbourne on 9 March 2004 and that the plaintiff agreed to purchase a new first class air ticket to London with Singapore Airlines for Dame Kiri to accommodate her trip to Melbourne. There is also no doubt that the plaintiff, Dame Kiri, Mr Grace/NGM and Mr Gleeson were all working towards the launch occurring on 9 March 2004. One of the reasons the meetings took place in Auckland in late February 2004 was for the purpose of discussing what would occur at that launch. 200 It may seem peculiar that Mr Grace would not inform Dame Kiri in his written communications of the nature of the launch however, Mr Grace had worked with Dame Kiri for a number of years and made a judgment that it would be better to explain the nature of the launch in person rather than by telephone or email. It is probable that he knew that he would need to persuade Dame Kiri that a sponsorship launch was appropriate, having regard to the fact that her previous experience was that she would only meet with sponsors after her performances. Dame Kiri's facsimile to Mr Grace on 13 February 2004 clearly demonstrates her concern about his lack of communication with her on the topic of the launch. Ms Newbury and Mr Williams had unfortunately proceeded with rather loose language by referring to the launch in some of their communications as a "press" launch and Dame Kiri's fax of 13 February referred to the event as a "press conference". However Mr Grace/NGM and thus Mittane were well aware of the nature of the launch from the time the materials were sent to Mr Grace in late December 2003. 201 Dame Kiri expressed a number of concerns in her fax of 13 February 2004 including the fact that it appeared to her that arrangements had not been put in place for those who travelled with her to be included in the trip. That clearly demonstrates an intention to be present at the launch, even if its nature was not clearly understood. Dame Kiri did not want to attend it, as she put it, "all on my own". She also expressed her concern about the lack of a "proper programme". She was asking Mr Grace to clarify "all of this" because she felt that it would become "an embarrassing situation" and she may not be able to "get out of it". I have little doubt that the concern expressed in that regard was consistent with an intention at that time to attend the launch and a need to sort it out before it went very much further. This fax demonstrates Dame Kiri's concern that she might be locked into something that she ultimately did not like. The fact that intention existed in mid-February 2004 is a factor to be taken into account when deciding whether a contract had been concluded or an agreement reached between the plaintiff and Mittane in December 2003. 202 The Mittane Letter provided that Mittane would procure Dame Kiri to participate in media interviews and associated promotional activities in connection with the Concerts, subject to Dame Kiri's availability and prior agreement on each occasion (cl 2.3). There was no express provision in relation to a "sponsorship launch" on 9 March 2004. 203 The next matter relied upon by the plaintiff in this regard was the fact that Dame Kiri provided her signature which, it was claimed, she knew was to be used on invitations to be issued to potential sponsors to attend the sponsorship launch. There is little doubt that Dame Kiri knew that the plaintiff was going to utilise her signature for some form of promotional material. This is not a claim of imputed knowledge in Dame Kiri by reason of knowledge in the agent Mr Grace/NGM or Mittane. The allegation made in the Commercial List Statement is that when Dame Kiri provided her signature she knew that it was to be utilised for invitations to be sent to prospective sponsors to attend the sponsorship launch. 204 Dame Kiri gave evidence that in about late 2003 or early 2004, Mr Grace asked her for her signature and she complied and signed her name on her letterhead and gave it to him. Her evidence was that it was not uncommon for her to provide her signature to Mr Grace to be used for message inserts into programmes, advertising and press kits. Dame Kiri's gave evidence that she had "no idea" that her signature provided to Mr Grace on this occasion was intended to be used for any materials for a sponsorship launch for the Concerts. I accept that evidence. Mr Grace did not tell Dame Kiri that it was for a sponsorship launch and indeed warned Mr Gleeson not to tell Dame Kiri about the nature of the launch, so that he would have the opportunity of telling her himself when he saw her in New Zealand in the last week of February 2004. 205 The plaintiff relied upon the conduct of Mr Grace and NGM providing material, on Dame Kiri's behalf, for the sponsorship packages and approving the sponsorship packages. Although I accept that at the date she provided her signature Dame Kiri did not know that it was to be used for the "sponsorship" launch, it is quite clear that Mr Grace and NGM and thus Mittane were well aware of the purpose for which the signature was obtained. The detail of the artwork and the content of the invitations and sponsorship packages were sent to Mr Grace in December 2003 and approval was sought for its use in January 2004 for approval. Mr Grace approved it by his email of 24 January 2004 in which he said that it seemed "fine to us". Although the agreement between NGM/Mr Grace and Mittane provided that NGM was not appointed as Mittane's agent, it is clear that Mr Grace and NGM held themselves out as having some agency authority from Mittane, although Mr Grace claimed that he would have to revert to Mittane when Mr Williams put the counter offer in relation to the irrevocable letter of credit 206 Other aspects of the post December 2003 conduct relied upon by the plaintiff include Mr Grace and NGM making comments on the draft budgets and submitting them for further comment by the plaintiff. There is no doubt that this occurred and that by January 2004, Mr Grace had indicated that he was much "happier" with the items in the budget. Other aspects of the conduct relied upon in this regard included Mr Grace advising Mr Williams that it was "essential" that he attend the meeting in Auckland; the expenditure on travel and accommodation arrangements for that meeting; the purchasing of the alternative ticket for Dame Kiri with Singapore Airlines; the funding of the helicopter trip for Dame Kiri to the Bay of Islands on the day of the Auckland meeting; and the arrangements for travel and accommodation for Dame Kiri and her entourage to attend the launch in Melbourne on 9 March 2004. Dame Kiri admitted in cross-examination that when she departed from the meeting on 29 February 2004 in Auckland, it was left on the basis that she would be attending the launch in Melbourne on 9 March 2004 (tr 333). 207 There is no issue that all of this happened and that the plaintiff incurred expenditure in relation to a great deal of it. The question is whether it evidences an agreement having been reached in December 2003. Was there a contract? 208 The Mitani Letter of July 2003 was provided to Mr Williams in response to his suggestion that he should have a look at it so that there would be "no surprises" when they came to "draw up the legals". That Letter made no mention of an irrevocable letter of credit, but did provide that time was of the essence for the payment of the Fee. That Letter left provision for the Fee to be negotiated and it is fairly obvious that the time for payment of that Fee would also have to be the subject of that negotiation. 209 It was on 16 July 2003 that Mr Williams first asked Mr Grace to "prepare contracts" for concerts for Dame Kiri on 5 and 12 February 2005 and to "add a proviso" that Dame Kiri would not be performing in Australia in 2004. Of course, this was a request that related to concerts for Dame Kiri alone in a winery in the Southern Highlands in New South Wales and at Werribee Park in Victoria. 210 The communications on 11 August 2003 in which Mr Williams asked Mr Grace to "confirm dates of 5th and 12th February, 2003 in Melbourne and Sydney"; and in which Mr Grace advised Mr Williams that he needed to reassure Dame Kiri about the choices of orchestra "prior to any contractual commitment", were at a time when the concerts were for Dame Kiri alone. Mr Farnham's participation was not contemplated at the time of these communications. That occurred in the following two weeks. 211 The "letter of intent" from Mitani to the plaintiff was dated 21 August 2003. The description "letter of intent" is used in the commercial world and in some instances can create more uncertainties than an absence of such a letter. It has been observed that the function of such a letter is not dissimilar to an agreement 'subject to contract' with a clear intention that the parties will continue to negotiate whilst not being necessarily irrevocably bound to each other: J Carter Contract, Restitution and Promissory Estoppel (1989) 12 UNSWLJ 30 at 40. The status of the relationship between the parties at the time of such a letter will depend upon the terms of the letter in question and the surrounding circumstances. 212 The Mitani letter of intent was carefully worded. It advised that it was "provisionally holding the dates of 5th & 12th February 2005 for possible concerts in Australia (Melbourne & Sydney) featuring Kiri Te Kanawa and John Farnham". The expression "provisionally holding the dates" combined with the expression "possible concerts" conveyed to the plaintiff that these dates were held only for the time being. Although Mr Grace described it as a "letter of intent", it contained absolutely no certainty or permanency. Mr Williams agreed in cross-examination that "provisionally" could mean "a year, a month, a week" (tr 74) and said that the reference to "possible concerts" was a "safety valve" for Mitani (tr 73). 213 It was on 30 September 2003 that Mr Williams suggested to Mr Grace that if he "would like to draft a suitable contract based on what we have discussed please do so". On 18 October 2003, Mr Williams asked Mr Grace "How is the contract progressing? When can I expect to receive?". On 20 October 2003, Mr Grace advised Mr Williams that a "Draft contract" would "follow as soon as possible for your comments". On 24 November 2003, Ms Newbury joined the quest for a contract. She advised Mr Grace, "We need the contract to be signed as soon as possible to enable us to proceed further. We would like all contracts to be finalized and signed off by 1st December as we will be launching to the corporate market in February 2004." That communication from Ms Newbury does not suggest that agreement on all matters had been reached and that all that was remaining was merely a matter of signature. Ms Newbury suggested that the contract had to be "finalized" and "signed off". 214 Mr Williams was cross-examined in relation to this request for a contract by Ms Newbury in her email of 24 November 2003, and gave the following evidence (tr 79-80): Q. Now, it represented the position, didn't it, in your mind, that, as at the date of this email, you needed a contract to be signed as soon as possible to enable you to proceed further? A. No. I already had an agreement. The contract never ever bothered me. The written contract. It bothered me to the extent that in an ideal world we would like a written contract. But did it bother me? No. It bothered other people far more.

[374]

217 This evidence does little for Ms Newbury's credibility. It is obvious that she was concerned to have a signed written contract and that she had discussed her concerns with Mr Williams. I do not accept that the email of 24 November 2003 contained a falsity. I accept Ms Newbury's evidence that the plaintiff "never stopped work on the project" however I am of the view that the email reflected Ms Newbury's view at the time, that the plaintiff needed the protection of a signed contract "to proceed further", as it was about to incur greater expenditure in the lead up to the sponsorship launch. 218 Ms Newbury pressed on further in December with her facetious email to Mr Grace noting there was still "no contract", and advising him that they were still at the same address. Even if I were to accept that Mitani and the plaintiff had agreed on many things, including the dates of the Concerts and the amount of the Fee for Dame Kiri, it is clear beyond any doubt that when the Mittane Letter arrived on 16 December 2003 there had been no agreement as to the method or timing of payment of Dame Kiri's Fee. The Mitani Letter had provided for time for the payment of the Fee to be of the essence and that was to be a fundamental and essential term of the proposed contract. That had not been agreed. The Mittane Letter set that out what it proposed in clear terms. The method and timing of the Fee for the two Concerts was to be by way of irrevocable bank letter of credit for $400,000 to be sent to Mittane within 7 days of the signing of the Mittane Letter. The method and timing of payment for the optional Concert(s) was once again by irrevocable bank letter of credit payable within 7 days of the confirmation of the optional Concerts by the plaintiff. This term was a fundamental and essential term of the proposed contract. The signing of the contract was the trigger for the provision of the letter of credit and was a fundamental and essential requirement before the plaintiff became liable to deliver it to Mittane. 219 It was not suggested in any of the correspondence that agreement had been reached on all matters by 15 December 2003, and that the terms of the Mittane Letter were outside that agreement. Rather, Mr Williams claimed that he asked Mr Grace whether it was seriously suggested that the plaintiff should be liable before "even a note [had been] sung". The plaintiff sought to negotiate the irrevocable letter of credit requirement, and I have no doubt that Mr Williams was hopeful that Mittane might relax that requirement, notwithstanding that Mr Grace had indicated both orally and in writing that he believed that Mittane would not do so. It was not until late February 2004 that Mr Williams put a counter proposal that 25% of the Fee be paid on signing of the agreement, with the balance to be paid in September/October 2003.

[375]

220 Mr Williams and Ms Newbury claimed that at the first meeting in Auckland, Mr Williams informed Mr Grace that although he was still "not happy about "the irrevocable letter of credit he would "do it" if "that is what [was] to happen". This discussion took place on 27 February 2004, on Mr Grace's version, or on 29 February 2004 on Mr Williams' and Ms Newbury's versions. Mr Grace denied that Mr Williams said he would "do it", if that was what was to happen. Mr Grace claimed that Mr Williams said "there was no way" he was going to agree to the irrevocable letter of credit, because he would then have to "give one" to Mr Farnham and "financially" that was a "huge problem". 221 No one took any notes of the meeting in relation to the discussion about the irrevocable letter of credit, and it is apparent that statements of evidence were not prepared until at least 18 months after the discussion. I am satisfied that the first meeting did not take place on the morning of 29 February 2004. I accept that Mr Gleeson was assisting Dame Kiri with other meetings on the morning of 29 February 2004, and could not have been present at a meeting prior to arrival at the meeting with Dame Kiri on that morning. There is also the entry "Frank" at 5pm in the running sheet for the rehearsal on 27 February 2004. I prefer the evidence of Mr Grace and Mr Gleeson as to the date on which the first meeting was held and I am satisfied that it was held on Friday 27 February 2004. 222 Contemporaneous documents or documents written within a reasonable time after a relevant discussion may assist with the determination of what was said at the time. In this instance the evidence of Mr Grace's communications with Mr Green at Mittane provide a little assistance. 223 In examination-in-chief, Mr Green said that on 23 March 2004 it became clear to him that the financial arrangements in relation to the concerts had not been settled, and he was informed that Dame Kiri was "unhappy" with some aspects of the Concerts, in particular the "cross over elements" (tr 355). He gave the following evidence (tr 355): Q. After reaching that view did you do anything? A. At the second meeting that we had on 23 March with Mr Grace present we agreed that one of us would write a formal letter to say that unless we could get the financial arrangements resolved to our satisfaction that we would have to terminate the negotiations. 224 In cross-examination, Mr Green accepted that Mittane had received the fax from Mr Grace asking Mittane to forward a fax to Mr Williams "as per the following draft", and that Mr Grace was of the opinion that such draft was the "best way to deal with Frank" (tr 368). Mr Green gave the following evidence in cross-examination (tr 368-369): Q. Had you had any prior discussions with him as to the best way to deal with Frank? A. In our meeting we had discussed that he would help us with the drafting, and that the principal objection that we would raise at that stage was the financial payment, but also mentioning the nature of the concert itself.

[380]

226 I am satisfied that it is probable that Mr Williams did not say that "there was absolutely no way" that he would agree to an irrevocable letter of credit. If he had said that, I doubt that Mr Grace would have referred to the "unlikely event" of Mr Williams coming up with the money. On the other hand the use of that expression does not mean that I accept that Mr Williams advised Mr Grace that he would "do it" if it was required. Mr Grace's proposed fax to Mr Williams gave the option to Mr Williams to agree to the irrevocable letter of credit. If Mr Williams had said that he would "do it", that is, agree to the irrevocable letter of credit if Mittane required it, I have little doubt that it would have been recorded in the plaintiff's letter to Mittane dated 31 March 2004. What was recorded in that letter relevantly on this topic was a denial that there had been a statement on the plaintiff's behalf that the plaintiff was unwilling to consider the letter of credit. There was also reference to the fact that the plaintiff had said it "would prefer" payment of 25% on signing and the balance in September/October 2003. The letter then recorded: "We are prepared to enter immediately into an Irrevocable Bank Letter of Credit if required". The letter made no mention of such a statement having been made at the meeting in Auckland. On balance, I am satisfied that at the meeting in Auckland in February 2004, Mr Williams did not say that he would "do it" if required. 227 I am of the view that Mittane seized the opportunity to extract itself from further negotiations by characterising the plaintiff's position unfairly and inaccurately. The real reason why Mittane ceased negotiations was that Dame Kiri did not want to perform at these Concerts. It was not because the plaintiff had refused to provide an irrevocable letter of credit. The parties were still in negotiations. 228 Much of this may be a little academic, because the plaintiff does not make a claim that the parties reached agreement in February 2004 in relation to the irrevocable letter of credit. Its case is that agreement was reached in December 2003. I am satisfied that there was no agreement in December 2003. There was no agreement on the essential and fundamental term of the method and timing of payment. There were also other aspects of the Mittane Letter that were the subject of counter proposals by the plaintiff which were not agreed to by Mittane. In the light of these continued negotiations and circumstances, I am satisfied that the post December 2003 conduct is not supportive of an agreement having been reached in December 2003. 229 In support of the claim that no agreement had been reached, counsel for Dame Kiri and Mittane relied upon quite a deal of evidence given by Dame Kiri about the lack of a musical programme. The absence of the musical programme does not support this claim. Both the Mitani Letter and the Mittane Letter both made provision for the "Musical Programme" to be agreed to "as soon as practicable" (cl 1.3). Those letters accommodated a musical programme being agreed to after the contract was signed. 230 There was no concluded contract and Mittane was entitled to withdraw from negotiations, but its conduct suggests to me that it had some real doubts about the fairness of such withdrawal. Mittane was not truthful as to the real reason for its withdrawal, being that Dame Kiri, its employee, simply did not want to perform at the Concerts. I have no doubt that Dame Kiri was extremely resentful that Mr Farnham did not attend the meeting in Auckland and that within days of the meeting in Auckland she disbelieved Mr Farnham's claim (given through Mr Wheatley) that his non-attendance was caused by the fear of flying in a light aircraft in severe electrical storms. That much is clear from Dame Kiri's following evidence (tr 323): Q. Did you still hold the view that John Farnham and Glenn Wheatley were in a position to fly from Napier to Auckland to meet you on the 29th of February? A. I don't know if they were in a position to fly. All I know was that the airport was open. Paul Gleeson's son flew out that day, that very morning, after John Farnham's concert, so we couldn't understand why John Farnham wouldn't leave, yet Mr Gleeson's son could leave.

[382]

Q. Was that ever discussed with Mr Williams? A. No, because we didn't realise that the airport was - we were told it was closed, and it was not until after we figured out that it wasn't closed. 231 Whatever be the real reason for Dame Kiri not wanting to perform at the Concerts, I am satisfied that it was the reason that Mittane ceased negotiations. However, commercial morality is not the barometer for determining the existence of commercial contracts and when parties are pursuing millions of dollars in turnover and/or profits, they must expect that those with whom they are dealing may insist on the rigorous application of the law of contract. I am satisfied that the plaintiff and Mitani and/or Mittane had not concluded a binding agreement by 16 December 2003 as pleaded. The plaintiff's contract claim fails. Collateral warranty 232 The plaintiff claimed that Mitani and Mittane warranted that Dame Kiri had read and understood the agreement, and agreed to perform all of the services required under the agreement. In final submissions, Mr Evans submitted (tr 428-429): The Mitani letter, of course, was much earlier than the Mittane letter, but it still had the same effect, and was an early warranty, which was reinforced by a subsequent warranty, provided in the Mittane letter. That was a collateral warranty to induce the plaintiff to make the contract that was on foot prior to 15 December. In respect of the Mittane letter, it was collateral to the plaintiff agreeing to enter into a contract with Mittane, the consideration being, firstly, entering into the contract, or, alternatively, agreeing to a variation as to the letter of credit, as sought by Mittane. 233 The warranty claim as pleaded and outlined by the plaintiff is premised on a finding that there was a binding contract. Having regard to my finding that the plaintiff's contract claim fails this claim also fails. Claim for expenses 234 The plaintiff made the following claim in paragraph 20 of its Commercial List Statement under the heading "Equitable Estoppel Claim": Between July 2003 and February 2004 the Defendants, and/or each of them, by words, writings and conduct made representations to the Plaintiff and in so doing created and fostered the belief, assumption and understanding of the Plaintiff that [Dame Kiri] would perform at the Concerts. 235 Some of the particulars to this claim are extremely broad: for instance, there is reliance on "telephone calls" between Mr Williams and Dame Kiri in August and October 2003 ((Par 20.1), and between Mr Williams and Mr Grace between July 2003 and February 2004 (20.2); and "e-mails" and/or letters between the plaintiff and Dame Kiri and Mr Grace between July 2003 and February 2004 (20.3). The only 'precision' I was able to obtain in respect of these claims, when I pressed counsel for the plaintiff for assistance, was the Schedule (Ex Z) which, as I have already said, listed over 70 documents in the Court Book by number with nothing more, and then listed conversations by reference to paragraph numbers in affidavits and statements with nothing more. 236 There are particulars of more precision being: the provision by Dame Kiri of her signature for use in the sponsorship invitations for the Launch (20.4); Dame Kiri's participation in the organisation of the Launch (20.5); the provision by Dame Kiri of material for use in the sponsorship package (20.6); Dame Kiri's unqualified agreement to attend the Launch (20.7); Dame Kiri's request for specific travel and accommodation arrangements to be made for her to attend the Launch (20.8); Dame Kiri's request for the Auckland meeting (20.9); Dame Kiri's attendance at the Auckland meeting (20.10); the approval of the budgets for the Concerts (20.11); the request to the plaintiff to agree to have the Mittane contract to provide Dame Kiri's services (20.12); the provision of a draft contract by Mittane to procure Dame Kiri's services (20.13); Dame Kiri's approval of the Concert dates (20.14); and the approval of the venues (20.15). 237 The claim in the Commercial List Statement is that the plaintiff relied upon these "representations" and was induced by them to understand, believe and expect that Dame Kiri would perform at the Concerts and by reason of that understanding, belief and expectation, the plaintiff acted to its detriment in funding, organising and promoting the Concerts (21 - 22, 25). The plaintiff also claimed that the defendants well knew, or should have known, that the plaintiff was spending substantial sums of its own monies in promoting the Concerts (23), and that it was "unconscionable" for the defendants to resile from the assumption that Dame Kiri would perform at the Concerts. The plaintiff claims that the defendants are liable to the plaintiff for its wasted expenditure in funding the organisation and promotion of the Concerts (26). 238 The plaintiff submitted that the facts of this case "fit very neatly" into the "principle" to be found in the following passage of Sheppard J's judgment in Sabemo Pty Ltd v North Sydney Municipal Council [1977] 2 NSWLR 880 at 902-903: [W]here two parties proceed upon the joint assumption that a contract will be entered into between them, and one does work beneficial for the project, and thus in the interests of the two parties, which work he would not be expected, in other circumstances, to do gratuitously, he will be entitled to compensation or restitution, if the other party unilaterally decides to abandon the project, not for any reason associated with bona fide disagreement concerning the terms of the contract to be entered into but for reasons which, however valid, pertain only to his own position and do not relate at all to that of the other party. 239 In Sabemo the plaintiff was the successful tenderer to the defendant for a proposal to lease land owned by the defendant and redevelop it into a Civic Centre. It was agreed that the acceptance of the tender did no more than bring the parties together, so that they could plan the project until the point was reached where they would enter into a contractual relationship, namely the proposed lease. The plaintiff's expert employees prepared a number of planning schemes and one that was submitted for approval was rejected because of the height of a particular proposed tower. Further work needed to be done, but before proceeding the plaintiff advised the defendant that it had already incurred costs of $300,000, and requested compensation before proceeding further. The defendant suggested that the cost of the further work should be shared equally. The plaintiff prepared a further scheme that was satisfactory and development approval was granted. Whilst all this work was occurring the solicitors for the parties were negotiating the terms of the proposed lease. The negotiations between the solicitors took some time and in the interim, a councillor of the defendant proposed a far less ambitious scheme for the Centre. Subsequently, the defendant resolved to "drop" the approved scheme in respect of which the plaintiff had provided its services. The plaintiff rendered an account for $426,000 to the defendant for work done "for the defendant" which was not paid. The plaintiff then sued successfully for its recovery. 240 Sheppard J observed that the plaintiff's claim was not in contract and that if it arose it was "quasi ex contractu" (at 882), an expression that has since been labelled "heretical", except where it is used as an historical explanation: K Mason and JW Carter, Restitution Law in Australia (1995) par [125]; see also the similar observations of Young J, as the Chief Judge in Equity then was, in relation to the expression "quasi contractual" in Cadorange Pty Ltd (in liq) v Tanga Holdings Pty Limited (1990) 20 NSWLR 26 at 34. After an exhaustive review of the relevant authorities Sheppard J said at 899-900: The question I must ask myself is whether, at this stage of the development of the law in this country, it is right to say that in some circumstances, in a case of this kind, there will be occasions when the law, irrespective of the common intention of the parties, will impose on one an obligation to pay the other for work done. After due reflection I have reached the conclusion … that there is such a principle in existence. 241 Sheppard J resisted the suggestion that he should fix a limitation that would circumscribe the extent of the right to recovery, and said at 900-901: It is enough for me to say that I think there is one circumstance here which leads to the conclusion that the plaintiff is entitled to succeed. That circumstance is the fact that the defendant deliberately decided to drop the proposal. It may have had good reasons for doing so, but they had nothing to do with the plaintiff, which, in good faith over a period exceeding three years, had work assiduously towards the day when it would take a building lease of the land and erect thereon the Civic Centre.

[385]

242 There was no appeal from Sheppard J's judgment in Sabemo. In POS Media Online Ltd v Queensland Investment Corporation [2001] FCA 809 Wilcox J found himself unable to agree with Sheppard J's identification of the principle that "in some circumstances" in cases of the Sabemo kind "there will be occasions when the law, irrespective of the common intention of the parties, will impose on one an obligation to pay the other for work done". Wilcox J referred to the following principle as stated by Burnside J in Sinclair v Rankin (No 2) (1908) 10 WALR 126 at 132: The principle which governs the present case I take to be this, that where work is done in anticipation of a special contract, and such contract is not entered into, no action can be maintained on a quantum meruit in respect of the work done. 243 Wilcox J respectfully disagreed with Sheppard J's conclusions in Sabemo and concluded that, "the law remains as stated in 1908 by Burnside J" [202]. Wilcox J reached this conclusion after referring to the cases that Sheppard J had reviewed in Sabemo and said: 199. The decision of the Supreme Court of New Zealand in Watson v Watson [1953] NZLR 266 is instructive. The plaintiff agreed to work with his brother in the country with a view ultimately to the erection and operation of a sawmill. The plaintiff received no remuneration. Gresson J held the plaintiff acted as he did in anticipation of a partnership in the sawmill; therefore he was not entitled to recover compensation for his labour during the period before completion of construction of the mill. However, the judge held, the failure of the defendant to take the plaintiff into partnership at that time constituted a repudiation of the promise of a partnership, so the plaintiff was entitled to compensation on a quantum meruit basis for his subsequent work. It will be seen the critical question was not whether particular work was beneficial to the defendant, but whether it could fairly be regarded as referable to the envisaged contract between the parties. 200 Sheppard J was fortified by an analogy with the law of restitution which, as he said, has developed significantly in recent years. He said (at 898) "it is now recognized that there are cases where an obligation to pay will be imposed (a promise to pay implied) notwithstanding that the parties to a transaction, actual or proposed, did not intend, expressly or impliedly, that such an obligation should arise. The obligation is imposed by law in the light of all the circumstances of the case". However, since Sheppard J wrote these words, it has become apparent that the basis of that imposition is the concept of unjust enrichment: see Pavey Mathews Proprietary Limited v Paul (1987) 162 CLR 221 especially per Deane J at 256-257. See also Mason and Carter, Restitution Law in Australia , (1995) Butterworths at paras [102] to [104]. At the end of their discussion in those paragraphs, the learned authors identify three factors restricting orders for restitution: "(1) a concept of benefit, (2) obtained at the expense of the person seeking restitution, and (3) the justice of restitution, combine to produce the principle of restitution to prevent or reverse an unjust enrichment." The application of this approach might have led to a different result in Watson v Watson.

[387]

246 The "gist" of the claim in Brenner was that the artist had actually or constructively accepted the benefit of the plaintiffs' services in circumstances where it would be unjust for the artist to do so without making restitution to the plaintiffs. Byrne J made observations in Brenner that I would respectfully adopt in the present case. His Honour said at 257-258: Where a person pays money to another it is not difficult to see that a benefit has thereby accrued to the recipient. Services present greater difficulty. If the law of restitution is available to oblige the recipient of the benefit of services to make restitution, it must acknowledge that such benefit may take many forms. … In my opinion, "benefit" in this context must be seen from the perspective of the recipient who is, after all, the person to be charged. It may be that for some idiosyncratic reason a defendant seeks performance of work which another would see as without benefit or, indeed, as a positive dis-benefit. … But where a person requests another to do something, it is not unreasonable for the law to conclude that the former sees some benefit in its performance, however wrong this view may be on an objective basis and for the law to act upon the perception of the recipient. 247 Byrne J referred to Sabemo (at 258) and the principle of "the expectation of the parties that the work would be paid for", and said at 259: Indeed, where the services have been requested by the party to be charged, the main area of interest is likely to be whether the circumstances of the request are such as to give rise to a right of payment. This will involve proof that the services were not provided as a gift: Pavey's Case, at pp 227-8. Furthermore, it will be necessary for the plaintiff to establish, where a certain event has not occurred, that the services were not provided on the basis that they were not to be paid for unless that event came to pass. In this category will fall cases where a tenderer carries out estimating or other work in response to an invitation to tender for a contract. It is understood in such cases that, in general, the tenderer takes the risk that the tender will be unsuccessful and that, as a consequence, the work will be unrewarded. It may be, however, that, even in such a case, an obligation to pay the tenderer will arise where the contract is not entered into by reason of a change of heart on the part of the proprietor: Sabemo's Case ; or where the work done falls outside that normally expected of tenderers: William Lacey's Case ; or where the work performed is of particular benefit to the proprietor: British Steel Corp. v. Cleveland Bridge and Engineering Co. Ltd. [1984] 1 All E.R. 504. 248 Although at par [200] of POS Media Online Ltd v Queensland Investment Corporation extracted above, Wilcox J referred to paragraphs [102] to [104] of Mason and Carter, Restitution Law in Australia his Honour did not refer to the learned authors' discussion of Sabemo and Brenner at par [1035]. At that paragraph the learned authors observed that Sheppard J held that the plaintiff was entitled to compensation or restitution, but in the state of the law, felt unable to characterise the claim as based on unjust enrichment and applied a principle of entitlement based on three factors being: (1) a joint assumption that a contract would be entered into; (2) work beneficial to the contemplated project, which the plaintiff would not have been expected, in other circumstances, to do gratuitously; and (3) a unilateral decision not to proceed to contract for reasons which, however valid, pertained only to the defendant's position. The authors analysed the "difficulties" in the compensation and restitution approach adopted in Sabemo and expressed the following view: [Sheppard J] may have taken the view that a claim in restitution is a claim for compensation, or held that restitution may be available even though the principle of unjust enrichment does not apply, perhaps on the basis that unjust enrichment applies only in cases of tangible benefit. We do not see either approach as viable today: each has been overtaken by subsequent developments. In Brenner v First Artists' Management Pty Ltd Byrne J, in following Sabemo in the void contract context, did not adopt a compensation rationale. He adopted restitution, and also rejected the thesis that where services have no end product the claim must be based on a ground other than unjust enrichment. He applied the concept of acceptance, and said that the question of benefit is determined by the "perspective of the recipient'.

[388]

249 In Independent Grocers' Co-operative Ltd v Noble Lowndes Superannuation Consultants Ltd (1993) 60 SASR 525 the parties had entered into arrangements for the setting up of a superannuation fund (the Fund) for Independent Grocers and Nobel Lowndes had provided a detailed letter outlining the work that it would do to establish the Fund. Nobel Lowndes commenced work on a deed to set up the Fund but before it finalised that work an issue arose as to whether the employees who were members of a union would subscribe to the Fund. The union commenced proceedings against Independent Grocers in the industrial jurisdiction and subsequently Independent Grocers decided to abandon the plan to set up the Fund. Noble Lowndes sought compensation for the expenditure it had incurred in providing the services up to the date that the plan to set up the Fund was abandoned. At first instance the trial judge ordered compensation on the basis of an implied term that Independent Grocers would cooperate to encourage their employees to subscribe to the Fund. On appeal the Court (Legoe and Matheson JJ, Duggan J dissenting) held that Nobel Lowndes was entitled to succeed on a quantum meruit basis for their reasonable costs and expenses incurred in supplying their services (per Legoe J at 538-539 and Matheson J at 556). In applying Sabemo Legoe J said at 539: Before departing from the respondent's claim on a quantum meruit I should briefly deal with the view expressed by my brother Duggan J whose reasons I have perused. I do not agree, with respect, that the circumstances here are such as to compare them with "some agents and consultants [who] are prepared to receive remuneration only if the venture proceeds or is successful. They take the risk that for one reason or another the venture will not reach fruition. The circumstances here, as found by the learned trial judge, were such that the appellant certainly at the time of the agreement in August 1987 through Mr Wodson was anxious to take "the initiative" and regarded the setting of the trust deed as a matter of some urgency. Clearly in those circumstances the respondent was not "taking the risk". The appellant requested the respondent to do the work, which was within its expertise, and the respondent did that work and kept to the deadlines. 250 In Regalian Properties plc v London Dockland Development Corp [1995] 1 WLR 212 Rattee J held that the principle in Sabemo would not have applied to the facts of that case and held that such principle was not established by any English authority. His Lordship said at 231: I appreciate that the English law of restitution should be flexible and capable of continuous development. However I see no good reason to extend it to apply some such principle as adopted by Sheppard J in the Sabemo case to facts such as those of the present case, where, however much the parties expect a contract between them to materialise, both enter negotiations expressly (whether by use of the words 'subject to contract' or otherwise) on terms that each party is free to withdraw from the negotiations at any time. Each party to such negotiations must be taken to know (as in my judgment Regalian did in the present case) that pending the conclusion of a binding contract any cost incurred by him in preparation for the intended contract will be incurred at his own risk in the sense that he will have no recompense for those costs if no contract results.

[390]

253 In E K Nominees Pty Ltd v Woolworths Ltd [2006] NSWSC 1172 the plaintiff made a claim for equitable compensation for expenses incurred in engaging consultants and carrying out work on the basis of its assumption that the defendant would enter into a lease of the premises in relation to which the work had been carried out. It claimed that the defendant failed to inform the plaintiff that its assumption was incorrect and subsequently refused to enter into the lease. The plaintiff claimed that it suffered detriment in the form of the expenditure and claimed compensation to remedy the detriment. The plaintiff's claim was expanded to include the claim that the defendant knew the plaintiff was doing the work and incurring expenses on the assumption that a lease would be entered into and in fact encouraged the plaintiff to do the work and incur the expenses. The plaintiff's claim was put on the basis of equitable estoppel, where the appropriate remedy was not to compel the defendant to make good the assumption, but to compensate the plaintiff for the detriment by a monetary award. The defendant denied that its conduct was unconscientious but did not take issue with the proposition that compensation would satisfy the equity necessary to avoid unconscientious conduct [211-212]. The trial judge, White J, noted [at 214] that the plaintiff did not plead or argue a quantum meruit claim and did not place any reliance on cases such as Sabemo and/or Brenner. Having found academic and text writers' support for the consideration of a restitution claim according to the principles of estoppel his Honour decided to consider the plaintiff's claim pursuant to such approach [218]. After an exhaustive analysis of the relevant cases his Honour said: 260 In the present case, E K Nominees must be taken to have accepted the risk that notwithstanding all of the work which it had done at Woolworths' request, Woolworths might not proceed to enter into an agreement for lease because of delays in satisfying the Council's requirements, or if Woolworths insisted on including a term in the agreement for lease with which E K Nominees could not agree. However, to adopt the language of Sheppard J in Sabemo (at 902-903), E K Nominees did not accept the risk of Woolworths abandoning the project " not for any reason associated with bona fide disagreement concerning the terms of the contract to be entered into, but for reasons which, however valid, pertain[ed] only to [its] own position ." Particularly is that so for the period of twelve months following Woolworths board's approval, during which E K Nominees was both obliged to commit itself to the project, or face a claim from Woolworths for its costs and loss of profit, and entitled to rely on the board approval remaining operative. 261 In other words, the recognition by one party that the other party is not legally bound by a contract, or is not legally bound to enter into a contract, (if there is a difference), cannot in all circumstances mean that it is not unconscionable for the opposite party to withdraw if it has induced the first party to act to its detriment in the belief that a contract will eventuate. Whether the first party is relying on the other's contractual intentions, whether it is doing so reasonably, and whether it has accepted the risk of the allegedly estopped party not proceeding in any circumstance, are questions of fact depending upon particular circumstances. 262 This is only to apply to this context what was said by Deane J in The Commonwealth v Verwayen (at 445) that: "Ultimately, however, the question whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula framed to serve as a universal yardstick but by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting upon the assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted." 254 White J held that the plaintiff in that case was entitled to equitable compensation. 255 The claim made by the plaintiff for its expenses is on a quantum meruit basis (although not pleaded) or for restitution or compensation on the basis of equitable estoppel. In final written and oral submissions, Mr McGrath submitted that the plaintiff should not be allowed to make a quantum meruit claim because such a claim was "not pleaded". I indicated to Mr McGrath in final submissions that although the particular claim was not expressly pleaded, it appeared to me that the plaintiff had made such a claim in seeking reimbursement for reasonable expenses incurred, and that it did not appear to me that there was any surprise or prejudice to the defendants. In those circumstances, Mr McGrath then made submissions in relation to the quantum meruit claim and the plaintiff's reliance on Sabemo. Mr Cobden adopted Mr McGrath's submissions and made the additional submission that if I were inclined to the view that the present case was not distinguishable from Sabemo then I should not follow it because it was "wrong". This latter submission was put formally without any elucidation. 256 Mr McGrath submitted that Sabemo is distinguishable because in that case Sheppard J found that there was a joint assumption that a contract would be entered into and in this case there was no such joint assumption. I disagree. Although I have held that a binding contract did not materialise for the reasons given above the parties' conduct supports a finding that there was a joint assumption that a binding contract would be entered into. That conduct included the preparation of the promotional material; the approval process for that material and its ultimate approval in late January 2004; the planning and preparation of the launch; the synchronising of the travel plans for Dame Kiri and Mr Farnham; the planning for and attendance at the meetings in Auckland to discuss the launch and the musical programme (although this latter aspect was not able to be concluded); the request for and agreement to expenditure on air fares and helicopter flights for Dame Kiri; awareness of the plaintiff's expenditure on many aspects of these plans; and continuation of the defendants' involvement whilst the draft Mittane Letter was still the subject of exchange of comments and negotiations. The letter of intent when combined with these other matters also has relevance. I am of the view that there was a joint assumption that a contract would be entered into and in this regard the present case is not distinguishable from Sabemo.

[391]

257 Mr McGrath also sought to distinguish Sabemo on the basis that much of the work carried out had been at the express request of the defendant Council. It is true that Mittane, through Mr Grace, did not expressly request the artwork and promotional material to be produced however, in my view, the express approval by NGM/Mr Grace was an express approval on Mittane's behalf, and is not relevantly distinguishable from the requests made in Sabemo for the preparation of the schemes. The other expenditure on the meetings in Auckland and the flights were at the express request of Mittane through Mr Grace. 258 Mr McGrath also sought to distinguish Sabemo on the basis that the defendant Council had deliberately decided that it was going to drop the negotiations, for reasons which had absolutely nothing to do with the plaintiff in that case. Mr McGrath submitted that in the present case, the negotiations were dropped because the terms of the Contract were not agreed to. As I have said above, Mittane ceased negotiations because Dame Kiri did not want to perform at the Concerts. Mittane opportunistically suggested that the plaintiff had refused to agree to the terms of the Contract. As I have found above, that was not true. The plaintiff had put a counter-proposal, but had not rejected outright the request for an irrevocable letter of credit. Although the underlying reasons why Dame Kiri did not want to perform at the Concerts has not been disclosed it would be a little absurd to suggest that the lack of a musical programme was a proper basis for withdrawal when Dame Kiri and Mr Farnham were yet to meet to discuss that musical programme. In any event I am satisfied that the absence of the musical programme was not the "reason" Dame Kiri did not want to perform at the Concerts. 259 It is not possible or really necessary to analyse the complexity of Dame Kiri's response that ultimately manifested as resentment at Mr Farnham's failure to attend the Auckland meeting. Initially it may have been uncomplicated disappointment that she was unable to meet with her co-performer for whom she obviously had some respect, otherwise she would not have invited him to sing with her at her own Foundation's Gala Concert. I accept that there was some concern with Mr Farnham's style but I have no doubt that Dame Kiri saw some benefit in performing with Mr Farnham, otherwise she would not have progressed the matter so far, particularly after Mr Grace's warning in relation to the plaintiff's incursion of expenditure. I am satisfied that the subsequent development of her suspicions about whether Mr Farnham was really unable to fly in a light aircraft in the stormy weather resulted in her serious resentment at his absence. I am satisfied that Mr Farnham's absence from the Auckland meeting was the major factor in Dame Kiri's decision to change her mind about her willingness to attend the launch and perform at the Concerts. This had nothing to do with the plaintiff. I am satisfied that Mittane's decision to withdraw from the negotiations had nothing to do with the plaintiff. In this regard the present case is not distinguishable from Sabemo.

[392]

260 I respectfully adopt Bryson J's, as his Honour then was, observation in Fansom [at 88] in relation to the continuing significance of Sabemo. This case falls into the category of case identified by Bryson J in that it presents "close analogies" with the facts in Sabemo. 261 Although generalisations are usually unhelpful, it seems to me to be reasonable to observe from the evidence in the present case that promoters in the entertainment industry undertake work that may be described as a "gamble", in the hope that they may secure a contract for the promotion of a concert or some other form of production. The costs of that work are part of the general overheads of the promoter's business and such costs are at the promoter's risk: William Lacey (Hounslow) Ltd v Davis [1957] 1 WLR 932 per Barry J at 934. That work is done gratuitously, albeit that a resulting contract may serve to recoup that outlay, depending upon the success of the production. 262 In this case, the plaintiff expended its own money in putting itself into a position to reach agreement with Mittane to procure the services of Dame Kiri. That expenditure is part of the plaintiff's overheads. The Mittane Letter was the basis of further negotiation, the details of which I have set out earlier in relation to the contract claim. During the period of further negotiations, the conduct referred to above occurred in addition to which Mr Grace (and Mr Gleeson at the request of Mr Grace) reviewed the budgets to the point in late January 2004 when Mr Grace expressed the view that he was "much happier" with the budget. These were all matters upon which the plaintiff relied in claiming that it had assumed that a contract would be entered into, albeit that it expressed that claim as one in which it assumed that Dame Kiri would perform at the Concerts. I am of the view these matters provided a reasonable basis for the plaintiff to assume that Mittane would enter into a contract notwithstanding negotiations were still on foot.

[393]

263 In large scale and complex commercial endeavours, a description applicable to the subject Concerts (tr 62, 161), the process of settling the terms of the contract may "lag behind performance" (to use the language of Mason and Carter at [1033]). The preparation for the sponsorship launch for the Concerts was work beneficial to the whole project. It was a means of raising not only financial investment for the project but also awareness of the planned performance by these "Two Great Voices" (the evidence was that Mr Farnham was known as "the Voice" and the promotional material built on that reputation for this description for Dame Kiri and Mr Farnham). It would also give both performing artists further public recognition in a new environment of the combination of opera and popular music. Tentative dates for the launch were proposed on 5 December 2003 prior to the delivery of the Mittane Letter to the plaintiff and on 22 January 2004 the parties settled upon 9 March 2004 as the date for the launch. At this stage the parties were still in the process of exchanging "comments" on the Mittane Letter, thus the contractual process was 'lagging behind' these detailed preparations, albeit that the letter of intent, admittedly "provisional", was in place. 264 The plaintiff had to take steps to prepare for the launch which included; securing the venue, preparing the artwork and promotional material; targeting the sponsors; liaising with television producers to interest them in attending the launch and/or televising the Concerts (tr 202, 232); sending the promotional material to the targeted group of attendees at the launch; organising the catering; organising travel and accommodation for Dame Kiri and her entourage; and numerous other commercially necessary steps to ensure the success of the launch. The suggestion to combine Dame Kiri with another performer had come from Dame Kiri's New Zealand agent Mr Gleeson in July 2003. He had suggested to the plaintiff that it should give "serious" consideration to a "support artist" and "preferably an Australian male" to "increase the local interest". It is clear that, at least at this time, there was a perceived need to increase the interest in Australia in attending Dame Kiri's performances. This perception was probably caused by the lack of commercial success of Dame Kiri's concerts in Australia in 2003. The launch was a step in the process of building that "local interest". 265 Mr Grace's conversation with Dame Kiri in Norwich on 9 December 2003 was just prior to Mr Grace sending the Mittane Letter to the plaintiff. In her second statement dated 25 January 2007, Dame Kiri denied that the conversation occurred (par 25(f)). Mr Evans cross-examined Dame Kiri in respect of her understanding of any expenditure that had been incurred as follows (tr 342-343): Q. At any time after 29 February, did you consider, in view of what had happened since July of 2003, that Leading Edge Events might have spent a considerable amount of money in progressing the concerts to the stage that they were at at the beginning of March 2004? A. I was not aware of any expenditure.

[400]

Q. --and you were told that the expenses were in excess of $100,000, would you have offered to compensate Leading Edge Events for their outlay? A. If someone else is spending my money, then I would rather expect that they would have a letter to say that they were allowed to spend it, but if Mr Williams wants to spend his own money, I don't think I have control over it. If he was spending my money, I would ask him to please let me know what was happening. So, as I had no idea, then how would I know how much he was spending. 266 In her witness statement Dame Kiri denied that Mr Grace had informed her that Frank was "probably starting to incur costs". However, as can be seen from the above evidence, Dame Kiri claimed to remember that Mr Grace had said that Mr Williams "may be incurring costs". That was the first time that such a suggestion was made by Dame Kiri, notwithstanding that she had addressed the conversation in her witness statement. I do not accept Dame Kiri's denial of the conversation with Mr Grace. I accept that Mr Grace did have a conversation with Dame Kiri on 9 December 2003, in which he suggested to her that if she wished to stop negotiations she should do so at that point, because Mr Williams was "probably starting to incur costs". I accept that Mr Grace particularised those costs as being "maybe around $100,000, maybe less". I also accept that Dame Kiri said in the face of that warning "let's see how far you can go with it". I have no doubt that at least from 9 December 2003 Dame Kiri well knew that the plaintiff was incurring costs in the planning of the proposed Concerts and that such costs could be around the $100,000 figure. Certainly Mittane was well aware of the expenditure having regard to the fact that Mr Grace and NGM were well aware of the expenditure. After the cross claim was abandoned there was no issue that Mr Grace and/or NGM were acting outside their authority and it is clear that Mr Grace and NGM held themselves out to the plaintiff as having authority to deal with the plaintiff on Mittane's behalf, except when Mr Grace expressly stated otherwise. 267 Dame Kiri has chosen to set up a contractual structure with Mittane, NGM, Mr Grace and Mr Gleeson that enables her to distance herself from the financial aspects of the provision of her services should she wish to do so. However I have no doubt that with all her experience over the years as a performing artist in the commercial world she is a reasonably astute businesswoman. A small but instructive example of Dame Kiri's approach in this regard was her requirement that Mr Williams and Ms Newbury could only have tickets to the Gala Concert in Auckland if they made a donation to her Foundation. I also have no doubt that when Dame Kiri saw the promotional material in the form of the boxed champagne glass she knew that the plaintiff had incurred costs in its production. In those circumstances I find Dame Kiri's evidence that if someone was going to spend her money then they should have a letter saying they were justified in doing so rather unhelpful. This is particularly so when Dame Kiri obviously demanded to be flown to the Bay of Islands in a helicopter and I have no doubt that she knew that the plaintiff was paying for that trip.

[402]

269 I should now consider the question of "benefit" to Mittane from the plaintiff's services. I am satisfied that if there was benefit to Dame Kiri as Mittane's employee then Mittane was the recipient of that benefit. There is no doubt that the services provided by the plaintiff were beneficial for the project as a whole for the reasons I have given in relation to the launch. If Dame Kiri had not changed her mind about going to the launch and performing at the Concerts, the services provided by the plaintiff would have done what Dame Kiri's own agent, Mr Gleeson, had suggested should be done, that is, increased the local, and perhaps wider, interest in Dame Kiri's performances. On the basis that benefit should be ascertained for the services taking into account the fact that the Concerts did not go ahead, I agree with Byrne J's observation that "benefit" should be seen from the perspective of the recipient: Brenner at 258. The mere fact that services are expressly approved or requested by the person to be charged may in some cases evidence a perceived benefit in the person who made the request. I am of the view that in this case the express approval of the material and the requests to attend the meeting in Auckland and to fund air tickets and the helicopter flight fall into that category. Additionally there is evidence that the 'end product' of the plaintiff's services were used. I am of the view that Dame Kiri was extremely impressed by the artwork and promotional material, notwithstanding that she restricted her admission in evidence to having said that it was "nice". Dame Kiri displayed it to her guests at her 60th birthday celebration and that suggests that she thought it was a little more than "nice". Mr Gleeson informed Mr Williams that he had observed Dame Kiri showing it off to her guests and that she appeared quite "happy" with the material. Although it may be "idiosyncratic", to use Byrne J's description in Brenner, I am satisfied that the plaintiff's services in this regard were of some "benefit" to Dame Kiri and although it was at a "private" party, the showing off of the material was beneficial to Dame Kiri and Mittane in allowing Dame Kiri's profile to expand into a different genre in association with Mr Farnham. It also obviously gave Dame Kiri enjoyment to be able to show the materials off. Although this may present as a lesser benefit than that which was perceived in Brenner, it does not mean it fails to satisfy the test. The assessment of the perception of the recipient will mean that there will be different levels of benefit in different cases.

[404]

272 I should turn now to the defendants' claim that the plaintiff did not satisfy the prerequisites for equitable estoppel. The plaintiff's estoppel case was limited to seeking recovery of the wasted expenditure. The defendant relied upon Brennan J's judgment in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 to submit that the plaintiff had not satisfied the six elements identified as necessary to establish an equitable estoppel. Brennan J said at 428-9: In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs. 273 As to the first element, I have found that there was an expectation that a contract would be entered into, however the plaintiff is not able to establish an expectation that the defendant would not be free to withdraw from the expected legal relationship. The parties were still in negotiations and either party could have withdrawn. The qualification to that position is where there has been expenditure and a Sabemo type of claim is made the expectation is that party A would not withdraw for reasons that have nothing to do with party B. However Mittane could have withdrawn for other reasons and thus the second limb of the expectation referred to in the first element referred to by Brennan J has not been established. That really puts an end to this alternative aspect of the plaintiff's claim for its expenses. However I will address the other elements in deference to the detailed submissions put by counsel for Dame Kiri and Mittane.

[405]

274 As to the second element, I am satisfied that the conduct referred to above including: the approval of the promotional materials and the expenditure thereon; the express requests to attend the meeting in Auckland; the express requests for expenditure to fund Dame Kiri's travel; together with the letter of intent induced the plaintiff into the expectation that a contract would materialise. 275 Mr Williams regarded Dame Kiri as a "friend". Dame Kiri would not concede that her relationship with Mr Williams could appropriately be described as a friendship. Whether one describes another person as an acquaintance, a friend or a business associate can sometimes be a rather complex excuse. Mr Williams' wife, Melissa Geralyn Williams, gave evidence of having a "few drinks" with Dame Kiri after her performance at the Mitchelton Winery in 1990. She recalled a holiday in the early 1990s when Dame Kiri and Mr Williams played golf together and Dame Kiri visited their home. Mrs Williams recalled a lengthy discussion with Dame Kiri about the planned refurbishment of their home. On this occasion Mrs Williams observed Dame Kiri rocking her son, Damian, to sleep whilst she sang to him. Mrs Williams recalled other instances of being present in Dame Kiri's company and also receiving an invitation to her 50th birthday party in New Zealand in about 1994. The last contact Mrs Williams could recall with Dame Kiri was in 1999 when she and her husband had a drink with her after her performance at a concert in Sydney. Mrs Williams also claimed that in the 1990s she and her husband had dinners with Dame Kiri and her then husband. Although Dame Kiri was not able to recall a number of these instances I accept that they occurred. It may be that Dame Kiri's approach to promoters has changed over the years and it is clear that she prefers to have Mr Grace/NGM and Mittane negotiate on her behalf, however, in this instance, it is clear that she was willing at least on some occasions to deal directly with Mr Williams. In particular she was willing to ring him directly, albeit in Mr Grace's presence, on 9 December 2003 to obtain some reassurance. Although they are now opposing litigants, it seems to me that it was probably reasonable for Mr Williams to describe the relationship with Dame Kiri, at least in the 1990s as friendship. 276 It was submitted that in relation to the third element identified by Brennan J the plaintiff did not act on the expectation so induced but rather on the "friendship" factor. It was submitted that Mr Williams had assumed that the Concerts would go ahead because he had dealt with Dame Kiri before and he believed that his "friendship" with her played an important part in that understanding. It is true that Mr Williams, very unwisely in my view, did think that his relationship with Dame Kiri would assist the plaintiff but that was not the only factor at play in this rather complicated setting. As I have said above I am satisfied for the reasons stated above, it was reasonable for the plaintiff to assume that Mittane would not cease negotiations on a basis that had nothing to do with the plaintiff. Although the friendship factor may have played a part in Mr Williams initial approaches to this project I am satisfied that the plaintiff acted in reliance upon the expectation that a contract would be entered into. 277 As to the fourth element, I have no doubt that all defendants knew that the plaintiff was incurring expenditure and made express requests for it do so. As for the fifth element, it is clear to me that on the assumption that a contract would be concluded the plaintiff altered its position by incurring expenditure in the absence of a written contract. Things were moving at a pace in February 2004 which required work to be done to prepare for the launch, notwithstanding that the parties had agreed to put to one side the question of an essential feature of the contract, the irrevocable letter of credit, until Mr Grace could deal directly with Mittane. 278 As to the final element I am not satisfied that the plaintiff failed to avoid its detriment. Mr Grace had to communicate with Mittane and was not in a position to do so prior to the time that the plaintiff had to incur further expenditure for the preparation of the launch. It was suggested that the plaintiff could have avoided its detriment if it had attended to the finalisation of the contract prior to incurring the expenditure. There are a number of factors that intervened preventing that outcome. They included the Christmas holidays, Mr Farnham and Mr Wheatley going on holidays, Mr Grace failing to communicate with Dame Kiri in the first two weeks of February because he wanted to wait until he was with her later in the month and the pressure of putting the launch together at a time to suit Dame Kiri's commitments in the United Kingdom. As I have said above the plaintiff's alternative claim in estoppel for its expenses is not made out.

[406]

279 The next question is the amount to be awarded on the quantum meruit claim. The plaintiff relied upon a schedule entitled "wasted expenditure". It is clear beyond any doubt that some of the claims made in that schedule are unsustainable and are really business overheads of a promoter pursuing the prospect of securing a production. I am satisfied however that the items of expenditure for the preparation of the promotional material for sponsorship is recoverable together with costs associated with delivering that material to prospective sponsors and for the time of the plaintiff's officers and employees in dealing with the planning for and ultimate cancellation of the launch. I am satisfied that the plaintiff is entitled to the costs for the concept development and staff wages in respect of that material and launch. That would also include merchandising materials such as t-shirts. The plaintiff is also entitled to recover the cost of the helicopter transfer on 29 February 2004 and the travel and accommodation costs incurred for both Mr Williams and Ms Newbury in attending the Auckland meetings. 280 The plaintiff is entitled to recover the amounts of the "Spark" invoices in respect of the launch. They amount to $102,364.27. The plaintiff is also entitled to recover the amounts for the staff wages between 5 February and 30 April 2004. In those circumstances the plaintiff is entitled to an amount of $13, 668.71 (that calculation halves the staff wages for Tyrell Russell in Ex AA). The plaintiff is also entitled to recover the cost of copyrighting, work for the invitations and merchandising but not for the purchase of Quickbooks. The plaintiff no longer claims any amount for the work on the motorcycle portrait. The total in this regard in Ex AA is $2,810.28. The plaintiff is entitled to recover the bookkeeping cost in March and April 2004 for $231 and the cost of couriers in the amount of $2,424.36. The plaintiff is also entitled to recover cost of the helicopter transfer in New Zealand for Dame Kiri in the amount of $3,212.01. The plaintiff is also entitled to recover the amount expended in arranging for Dame Kiri's alternative ticket to London to the extent that such refund did not reimburse it in the amount of $1,170. 281 The plaintiff claimed $3,568.50 for the purchase of lists of potential sponsors. That does not seem to me to be a cost that ought reasonably be paid by Mittane. Although there was no expert evidence in relation to what one may expect of a promoter in gathering together suitable sponsors, it does not seem to me that in this instance Mittane should have to pay for the plaintiff purchasing those lists. There is also the capacity for the plaintiff to utilise such lists for prospective clients other than Mittane. Accordingly, I do not intend to allow for the purchase of those lists. 282 The plaintiff is entitled to recover costs of Mr Williams' and Ms Newbury's trip to New Zealand which includes airfares, accommodation, parking and taxi transfers totalling $2,182.58. 283 I am satisfied that in the circumstances of the paucity of evidence in relation to the other expenses in the Schedule (Ex AA), I should not allow any other expenses. The total amount recoverable by the plaintiff is $128,063.21.

[407]

Misleading or deceptive conduct 284 The plaintiff made a number of claims of misleading or deceptive conduct. It claimed that Dame Kiri had breached s 42 of the FTA; that NGM and Mittane breached s 52 of the TPA; and that Mr Grace and Dame Kiri were accessorily liable under s 75B of the TPA in respect of the alleged breaches of s 52 of the TPA by NGM and Mittane. 285 The Commercial List Statement does not enable the ascertainment with any precision of the true basis upon which it is claimed the representation alleged to have been made by Dame Kiri arose or was made. The Commercial List Statement alleges that Dame Kiri represented to the plaintiff that "she would perform at the Concerts". The particulars to that claim by reference to earlier parts of the 'pleading' rely upon the broad claims of telephone calls, emails and/or letters over an eight month period without any particular detail. The schedule (Ex Z) was equally unhelpful. It is apparent that the plaintiff claims that from the quagmire of emails, letters and conversations, one could extract the representation that Dame Kiri "would perform at the Concerts". Even in final address, counsel for the plaintiff did not point to any particular document or conversation that amounts to such a representation. Certainly there were emails and conversations in which the parties discussed the venues, the fee, the launch, the accommodation and the various arrangement for air tickets and helicopter trips but the claim that Dame Kiri "would perform", if made, was always subject to the finalisation of the contract between Mittane and the plaintiff. 286 The plaintiff also claimed that Dame Kiri was under a duty to inform it that she would not be performing at the Concerts and that her silence until after the Auckland meeting was misleading or deceptive. In this regard, the plaintiff relied upon an email from Mr Gleeson to Mr Grace on 19 February 2004 referred to earlier in this judgment which included the statement, "For your ears only - Kiri is still making negative sounds about the concerts with Farnham". The plaintiff claims that as at 19 February 2004, Dame Kiri had obviously been having discussions with Mr Gleeson in which she had expressed a negative attitude to performing at the Concerts and that she had a duty to advise the plaintiff that she was not going to perform at the Concerts. 287 Dame Kiri was far from silent about her concerns with Mr Farnham's style. As I have already said she raised them directly with Mr Williams on 9 December 2003 when she telephoned him in Mr Grace's presence. Mr Williams knew from that date, if not earlier, that Dame Kiri wanted to meet with Mr Farnham and establish whether a rapport was possible and to plan the musical programme. It is obvious that two highly successful performing artists would need careful management so that their respective needs were met. Mr Williams knew that there was a possibility that Dame Kiri and Mr Farnham may not have the necessary rapport to assuage Dame Kiri's concerns. 288 The plaintiff relied upon the same conduct referred to in relation to the claim for expenses to allege that Dame Kiri breached s 42 of the FTA. It is important to distinguish this claim from the claim that it was reasonable to assume that a contract would be entered into. A major problem for the plaintiff, even if the representation had been made, is that I am not satisfied that it can establish the requisite reliance upon such a representation for the purposes of the breach of s 42 of the FTA. The plaintiff requested that Mittane and/or Mr Grace/NGM have Dame Kiri confirm that she would be bound to perform at the Concerts by signing the agreement between Mittane and the plaintiff. When the plaintiff was advised that Mittane would not allow Dame Kiri to sign the agreement, it then requested that Dame Kiri sign a "side letter". Far from relying upon any alleged representation it seems to me that the plaintiff was concerned that it did not have a promise that Dame Kiri would perform at the Concerts. 289 I am not satisfied that the plaintiff has established that Dame Kiri has breached s 42 of the FTA. 290 The claim against Mittane for misleading or deceptive conduct seems to me to be quite hopeless. The claim as pleaded is that by sending the Contract (the Mittane Letter) on 16 December 2003 Mittane represented that it "could, and would, procure" that Dame Kiri "would perform at the Concerts". As I have already said, this was a draft contract that was subject to further negotiations. The mere sending of the document to the plaintiff did not amount to such a representation. 291 There is also a claim against Mittane that it had a duty to inform the plaintiff if Dame Kiri "was not to perform at the Concerts". It is alleged that its "silence" following the representation was misleading or deceptive. Even if the representation had been made, by sending the draft contract, Mittane did not remain silent. When it was instructed that Dame Kiri did not wish to perform at the Concerts it ceased negotiations. It is true that Mittane did not expressly state that Dame Kiri did not want to perform at the Concerts, however the cessation of negotiations meant that she would not do so. The plaintiff's claims that Mittane was in breach of s 52 of the TPA fails. It follows that the plaintiff's claim against Dame Kiri for accessorial liability must also fail. 292 The plaintiff claims that NGM breached s 52 of the TPA by representing to the plaintiff that Dame Kiri "would perform at the Concerts". Mr Cobden submitted that if there is a representation at all to be extracted from the "great morass" of emails and conversations as pleaded over the eight month period, then it could only be along the lines of a representation that "if agreement on all other issues is reached, these are suitable dates, and a suitable fee, for Dame Kiri to perform". It was submitted that such a representation was never made untrue until the withdrawal from negotiations. I agree with these submissions. 293 The plaintiff claimed that NGM had a duty to advise the plaintiff that Dame Kiri was making "negative sounds" about the Concerts and that NGM's silence in this regard was misleading or deceptive. Mr Grace was cross-examined about the email from Mr Gleeson and agreed that he had not disclosed to the plaintiff that Dame Kiri had apparently discussed her negativity about the Concerts with Mr Gleeson. He gave the following evidence in cross-examination (tr 402): Q. Was that because it was for your ears only that you didn't inform? A. I think it is because as Kiri's manager I had heard her concerns because I was with her in Norwich and I was one thousand miles away and Paul Gleeson obviously was hearing the same concerns and I felt it was best that as Kiri was my, I didn't want to discuss things with Kiri over the phone so I thought I would wait and talk to her about her concerns when I got to New Zealand. 294 Even if NGM had a duty to inform the plaintiff that Dame Kiri would not perform at the Concerts, that point had not been reached at the time that Mr Gleeson informed Mr Grace of Dame Kiri's "negative sounds". It must be remembered that this was only six days after Dame Kiri had penned her fax to Mr Grace requesting information about the launch. It is clear that some of her "concerns" had probably been caused by the lack of communication with Mr Grace in the first two weeks of February. The plaintiff has not established that Dame Kiri had decided not to perform at the Concerts prior to 23 March 2004. 295 The plaintiff relied upon NGM/Mr Grace's approval of the artwork for the launch as conduct amounting to a representation that Dame Kiri "would perform" at the Concerts. The plaintiff assumed that a contract would be entered into with Mittane and I have found that this assumption was reasonable. That finding does not amount to a finding that NGM/Mr Grace represented that Dame Kiri "would perform" at the Concerts. There is a distinction between those two positions. Even if the approval of the artwork were to amount to such a representation the plaintiff has the difficulty that it did not rely upon this representation, rather it wanted the side letter so that it did have representation or promise that Dame Kiri would perform at the Concerts.

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