General damages for pecuniary Loss
15The plaintiff claims damages for loss to reputation arising from breach of contract. In appropriate cases, damages may in principle be awarded for loss of reputation caused by breach of contract: Mallick v BCCI [1997] 3 All ER 1, citing Aerial Advertising v Batchelors Peas Ltd and Anglo-Continental Holidays v Typaldos Lines (London) [1967] 2 Lloyd's Rep 61. This right has been recognised not only in other jurisdictions in Australia (Marston & Cook Pty Ltd v Sensis Pty Ltd [2008] VSC 568; Heidelberg Graphics Equipment Ltd v Andrew Knox & Associates Pty Ltd (1994) ATPR 41-326 at [171]) but in New Zealand (New Zealand Airline Pilots' Association v Air New Zealand Ltd [1992] 2 NZLR 656). As the High Court has explained in Poseidon Ltd & Sellars v Adelaide Petroleum NL (1994) 179 CLR 332, a claim for damages for loss of reputation is available whether the damage occurred by reason of breach of contract, tort or contravention of s 52(1) of the Trade Practices Act 1974 (Cth).
16The circumstances in which general damages for pecuniary loss may be claimed from breach of contract are set out below. Such a claim is not novel, but it is unusual.
17The loss of reputation and damage to the trading reputation of the plaintiff arise because the impact of a "no show" by the main attraction of the 2011 concert, particularly in the circumstances of the proceedings described to me, impacts adversely upon its reputation for staging events and procuring the attendance of prominent artists. The no show by the second defendant has therefore impacted upon the ability of the plaintiff to stage future events, attract patrons and compete with rivals. For example, in order to do so, the plaintiff must participate in social media, such as Facebook. The Facebook page for the "Fat As Butter Festival" received angry postings from Facebook users complaining about the no show of Flo Rida at the 2011 event. The nature of Facebook is such that the plaintiff is obliged to permit such postings to remain on the site, as it would be inadvisable for the plaintiff to remove such postings. Bad publicity such as this has had a "flow-on" effect to the 2012 Fat As Butter Festival, as has the negative publicity in newspapers and on YouTube.
18In order to promote the 2012 festival successfully, the plaintiff was obliged to lower ticket prices for early sales to $99 per ticket for the first two weeks only. The plan was that the ticket price would then be increased to $109 (for the second release) and $119 (for the third release). Even with this reduction, the comparative ticket sales, when compared to previous years, has been so much lower that the plaintiff was obliged to continue the sale of the tickets at the $99 rate, and it is not envisaged that the price will be increased. At the same time, the plaintiff has also been obliged to spend more funds on hiring talent, in order to ensure that an eminent talent could be secured to attract customers, despite the previous damage caused by the "no show" to the plaintiff's reputation. The plaintiff has secured the services of a US band called "Good Charlotte" to headline the 2012 event and a further seven international acts, whereas comparatively there were only three international acts for the 2011 event.
19Despite these efforts, ticket sales are down, and a revised estimate for ticket sales is that they are unlikely to exceed 10,000 in number. This will result in a loss for the financial year ending June 2012 of approximately $240,000, based on the budget projections set out at paragraph 32 of Mr Lean's affidavit.
20The net profit for food / beverage / merchandise / amusement is $20 per head. In addition to the loss of revenue for ticket sales, if only 10,000 tickets can be sold for the 2012 event, this will result in a loss of $40,000.
21In addition, the 2012 event has lost sponsors. Mr Lean had set out details of these in his affidavit, at paragraphs 34-38. One of those sponsors said to him that the reason for a refusal to be involved in 2012 concert was because of the reduced ticket sales "following last year" (affidavit of Mr Lean, paragraph 35). Other sponsors agreed to participate, but were not prepared to increase the sponsorship amount.
22The circumstances in which general damages may be awarded for breach of contract are discussed by Atkinson J in Aerial Advertising Co v Batchelors Peas Ltd (Manchester). The court held that so long as a loss can be proved, it is immaterial that it cannot be calculated with precision, but nevertheless an actual loss must be proved and not damage to reputation. Damages were awarded for steps taken to rectify the damage caused by the bad publicity. In Aerial Advertising Co v Batchelors Peas Ltd (Manchester), that was achieved by inserting advertisements in the newspaper. In the present case, this has been achieved by the hiring of additional talent, as well as putting down the price of tickets.
23In addition, there is a claim for general damages in respect of the pecuniary loss flowing from the conduct of the defendants, including the loss of ticket sales, loss of food and beverage sales and loss of sponsors. Atkinson J explained the basis upon which general damages could be awarded in respect of contractual pecuniary loss as follows (at 795):
"There is only a claim for general damages in respect of pecuniary loss, and Mr Roskill says that I cannot give general damages for pecuniary loss in respect of breach of contract, and that I can give damages only by way of special damage for a breach of contract. For that argument Mr Roskill relies upon Groom v Crocker. I fail myself to see any difference in principle between a claim for special damage and a claim for general damage. One, of course, has to be proved as completely as does the other. The only difference is that, where one is claiming special damage, the circumstances are such that one is able to put one's finger on a particular item of loss and say, "I can prove that I lost so much there, so much there, and so much there," whereas a claim for general damage means this: "We cannot prove particular items, but we can prove beyond all possible doubt that there has been pecuniary loss." Once that has been proved, I cannot myself see any difference in principle between special damage and general damage. When one reads Groom v Crocker, one sees that, so far from saying that there is any difficulty in recovering general damages, to my mind it says precisely the opposite."
24Aerial Advertising Co v Batchelors Peas Ltd (Manchester) was considered and followed by the High Court in Poseidon Ltd & Sellars v Adelaide Petroleum NL, where the court held that loss of an opportunity to obtain a commercial advantage or benefit may amount to loss or damage, and that damages for deprivation of a commercial opportunity should be ascertained by reference to the court's assessment of the prospect of success of that opportunity, had it been pursued.
25The court stated at 355:
"Notwithstanding the observations of this court in Norwest, we consider that acceptance of the principle enunciated in Malec requires that damages for deprivation of a commercial opportunity, whether the deprivation occurred by reason of breach of contract, tort or contravention of s 52(1), should be ascertained by reference to the court's assessment of the prospects of success of that opportunity had it been pursued. The principle recognised in Malec was based on a consideration of the peculiar difficulties associated with the proof and evaluation of future possibilities and past hypothetical fact situations, as contrasted with proof of historical facts. Once that is accepted, there is no secure foundation for confining the principle to cases of any particular kind.
On the other hand, the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities. It is no answer to that way of viewing an applicant's case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable."
26Poseidon Ltd & Sellars v Adelaide Petroleum NL was considered and discussed most recently by the New South Wales Court of Appeal in Prosperity Advisers Pty Ltd v Secure Enterprises Pty Ltd (t/as Strathearn Insurance Brokers) [2012] NSWCA 192. Tobias AJA set out at [73] the propositions relevant to the claim for damages by the appellant. These may be briefly summarised as follows:
(a)There must be proof, on the balance of probabilities, that some loss or damage has been sustained. This may be done by demonstrating that the conduct of the party in breach caused the loss of a commercial opportunity which had some value which was not negligible;
(b)There must be evidence as to what the plaintiff would have done had it known of the breach, or of the problem;
(c)The must be evidence as to the value of the chance alleged to be lost as a result of the conduct in breach;
(d)The evidence must establish that there is a substantial, and not merely a speculative, prospect of loss.
27A significant part of the loss occurred because of the very late notice the defendants gave of their intentions to breach the contract. The emails from disgruntled concertgoers make this clear. The announcement of the "no show" occurred at 4:00pm, which was the time the second defendant was due to commence. Notification had received only shortly beforehand. Much of the damage to the plaintiff's reputation flows from this.
28The evidence in Mr Lean's affidavit makes it clear that the damage caused by the last minute no show by Flo Rida has had a significant impact not only upon the plaintiff's profits from the 2011 concert year, but in relation to its proposed planning of the same annual concert in 2012. I am satisfied from the evidence before me that the plaintiff can establish a claim for general damages for pecuniary loss in the sum claimed.