Federal Court of Australia

Tour Squad Pty Ltd v Fifth Amendment Entertainment Inc (No 2) [2021] FCA 546

ORDERS

THE COURT ORDERS THAT:

1.    The applicant have judgment against the respondents in the sum of four hundred and seventy-eight thousand, one hundred and nineteen dollars and seventy-three cents ($478,119.73).

2.    The respondents pay interest on the above sum at the rate of 4% from 3 July 2017 to the date of judgment in the sum of seventy-four thousand, five hundred and eight dollars and eight cents ($74,508.08).

3.    The respondents pay the applicant’s costs of the action, including any reserved costs, to be taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    Tour Squad Pty Ltd (Tour Squad) conducts business in Australia and New Zealand as a promoter and facilitator of musical entertainment. In 2017, it entered into an agreement with the first respondent, Fifth Amendment Entertainment Inc (Fifth Amendment), which contracted on its own behalf and on behalf of an entertainer, Mr Jayceon Terrell Taylor (Mr Taylor), who also adopts the stage name “The Game”. The agreement provided for Mr Taylor to undertake a tour of Australia and New Zealand in late 2017 during which he would perform at seven concerts, one in New Zealand and six in Australia. In performance of its obligations pursuant to the agreement, Tour Squad paid substantial amounts to Fifth Amendment. Despite the receipt of those funds, Mr Taylor ultimately failed to travel to Australia and perform as the contract required. Indeed, neither Fifth Amendment nor Mr Taylor attempted to perform any of their contractual obligations. In this action, Tour Squad seeks, inter alia, damages for breach of contract by Fifth Amendment, the second respondent, and Mr Taylor or, in the alternative, damages for contraventions of the Competition and Consumer Act 2010 (Cth) (CCA) consequent upon their having engaged in misleading or deceptive conduct.

2    Although the respondents entered an appearance in the action and filed a defence, their participation in the litigation has been sporadic at best. On a number of occasions, their solicitors were unable to assist the Court at Case Management Hearings due to a lack of instructions. For this reason, the progress of the proceedings was somewhat stultified. Directions were made affording the respondents the opportunity to file evidence and a written outline of submissions for the purposes of the trial, however they failed to avail themselves of that. When the matter was called on for trial on 15 April 2021, the respondents appeared by their solicitor but, again, he held no instructions. The solicitor sought leave to be excused from further attendance and that leave was given. Thereafter, the trial proceeded in the respondents’ absence.

3    On the material adduced before the Court, Tour Squad is entitled to succeed in respect of a portion of its claims, with the consequence that it is entitled to damages for breach of contract amounting to its reliance losses. Otherwise, its claims for damages in the nature of expectation losses under the agreement and for damages in respect of misleading and deceptive conduct are dismissed.

The facts

4    As mentioned, Tour Squad carries on business as a promoter and facilitator of musical entertainment in Australia and New Zealand. In the course of that business, it engages with international artists and their agents for the purposes of promoting tours and concerts. At the relevant time, the directors of Tour Squad were Miss Luisa Spedaliere (Ms Spedaliere), Mr Justin Bellamy (Mr Bellamy), and Mr Adam Neild (Mr Neild).

5    Fifth Amendment is incorporated in the United States of America and carries on the business of promoting musical entertainment for and on behalf of musicians. It might colloquially be referred to as the “manager” of music artists. The second respondent, Mr Cash Jones (Mr Jones) was the owner and “President” of the company. By the respondents’ defence filed in this action, it is admitted that Mr Jones was its duly authorised representative. Mr Jones apparently also used the pseudonym “Wack100” or “Wack”.

6    Mr Taylor is an artist skilled in the music genre referred to as “rap”. He is also a citizen of the United States of America, resident in the State of California. In the defence filed in the action, he admitted that Fifth Amendment and Mr Jones were authorised to act as his agent or on his behalf in “arranging for musical performances whether in Australia or otherwise”. Fifth Amendment and Mr Jones both admitted that they represented Mr Taylor and were authorised to act on his behalf in respect of such performances.

7    Tour Squad was incorporated on 29 April 2016 with the intention of pursuing the business of facilitating and promoting live musical performances throughout Australia and New Zealand. It seems that Ms Spedaliere was its driving force, she having been an urban music producer and performing arts promoter with over 25 years’ experience in the entertainment industry. She had known Mr Neild and Mr Bellamy for a number of years and the company was formed so that their respective and complementary skills might be pooled for the purposes of undertaking Tour Squad’s business.

8    After its incorporation, Tour Squad, by Ms Spedaliere, Mr Neild and Mr Bellamy, determined to pursue a project of promoting a series of live musical performances across Australia and New Zealand which were to take place in 2017. The nature and scope of the project was discussed for some time between Tour Squad’s directors, which discussions included the identity of suitable artists who might be engaged to perform at concerts. In the course of those discussions, Mr Bellamy indicated that he had previously worked closely with Mr Jones of Fifth Amendment which managed Mr Taylor and that this association might prove beneficial in securing the services of Mr Taylor, in his guise as “The Game”. Tour Squad settled on a proposal of promoting a tour in Australia and New Zealand by Mr Taylor and, after seeking investors for the project, ascertained that they were able to offer an “artist’s compensation package” of US$175,000 over seven performances to occur in 2017.

9    As Mr Bellamy had an existing relationship with Mr Jones, the initial negotiations to secure Mr Taylor’s services were conducted between them. In the course of the early discussions, Mr Jones mentioned that Mr Taylor would wish to bring with him a “crew” of about 15 persons.

10    It was apparent from Mr Bellamy’s prior dealings with Mr Jones that in order to seriously negotiate with Fifth Amendment and Mr Jones a “binder agreement” needed to be put in place. That would involve the payment of money, described as a “binder fee”, by Tour Squad to Fifth Amendment. In the evidence before the Court are a series of messages sent via the messaging platform “Whatsapp” between Mr Jones and Mr Bellamy as to the requirement for a binder agreement and the amount of the binder fee. In his affidavit evidence, Mr Bellamy described the binder agreement as being “commonly used in our industry by promoters, to reach and [sic] agreement in principle with the relevant artist, to prevent another promoter from bidding for that artist, while the parties settle on the terms of a tour agreement”. Although the binder fee was normally held in escrow (in trust) by the artist’s agent, in this case Mr Bellamy said he accepted that it might be received and held by Fifth Amendment, as Mr Taylor’s manager. There was no evidence before the Court as to the significance of the distinction between the role of a musical artist’s agent and that of their manager, but it would seem that a greater degree of trust is reposed in the former by third parties.

11    On or about 12 April 2017, a binder agreement in terms prepared by Tour Squad and signed by Ms Spedaliere was sent by electronic transmission to Fifth Amendment (the Binder Agreement). It was then counter-signed by Mr Jones for Fifth Amendment. It was not contended that Mr Taylor was a party to that agreement. The document is drafted in vague terms but, in general, confirms Tour Squad’s desire to secure the services of Mr Taylor to appear at seven shows in Australia and New Zealand in the month of August 2017. It does not however contain any details of the remuneration to be paid to Fifth Amendment or Mr Taylor in respect of those performances, other than providing for a binder fee of US$15,000 (the Binder Fee). It instead advised that a full offer would be provided to Fifth Amendment in relation to the proposal by 28 April 2017. The document then contained the following terms:

On your acceptance to consider our offer we will remit a deposit in the amount of FIFTEEN THOUSAND US Dollars (USD $15,000) via wire transfer as a binder to secure our interest in proceeding with a tour in August 2017.

If our FULL OFFER is accepted No Later than COB MONDAY 1 MAY 2017 then the following payments will be made in this order:

The binder amount will be applied toward any further funds required as part of the agreement. If the Artist rejects the OFFER, the deposit is returned immediately in FULL. The deposit will be held for a maximum of 20 days.

If no agreement is reached by COB Monday 1 May 2017, then the deposit will be returned unless Buyer agrees to extend

12    In the course of the hearing, Ms Spedaliere gave evidence, reflective of that in her affidavit, that the entry into a Binder Agreement might carry with it more than can be derived from its express words. She said that, in the entertainment industry, all parties understood that the entry into a Binder Agreement, whereby the promoter paid money to the agent to prevent another party from securing the artist while the specific details of the full contract were agreed, had the consequence that the parties were bound to proceed to enter into the full contract save and unless some unforeseen and unexpected circumstance occurred. Ms Spedaliere gave evidence that this was her experience over many years and it was necessary because, once the Binder Agreement was entered into and prior to the final agreement being executed, the promoter was required to undertake a substantial amount of work. In particular, it was required to incur expenditure and liability in securing venues and other related matters.

13    On the basis of Ms Spedaliere’s evidence in respect of the nature of the Binder Agreement, Tour Squad submitted that, by Mr Jones’ conduct in entering it, Fifth Amendment represented that:

(a)    Mr Taylor would perform at seven concerts in Australia and New Zealand;

(b)    five of the concerts would be performed in Australia and two in New Zealand;

(c)    the seven concerts would be performed in the month of August 2017; and

(d)    in general, the tour would proceed.

14    Tour Squad alleged that, consequent upon these representations, it paid the amount of US$14,800 to Fifth Amendment, and subsequently entered into the full tour agreement, paid a total amount of US$85,500 in further payments under the contract, identified appropriate venues and expended money for the purposes of securing them, entered into advertising agreements and undertook advertising, engaged suppliers and staff, and otherwise incurred expenses relating to the tour.

15    It is uncontroversial that in furtherance of the Binder Agreement, Tour Squad did pay the amount of US$14,800 to Fifth Amendment on 12 April 2017. On the evidence before the Court, it was agreed between Mr Jones for Fifth Amendment and Mr Bellamy for Tour Squad that the further amount of US$200 would be paid at a later date, but it is unclear whether this occurred.

16    Although the Binder Agreement indicated that a full offer would be provided to Fifth Amendment by 1 May 2017, this did not occur. The terms of the full agreement were not provided until after that date and it was not entered into until June 2017. This seemed to follow from the difficulties encountered in negotiating terms. Nevertheless, the parties appeared to proceed on the basis that the Binder Agreement remained in place, for what it was worth, and they continued their negotiations.

17    On 8 May 2017, Mr Jones sent a message to Mr Bellamy indicating that he required the contract to provide for the performance dates to fall between 22 September 2017 and 30 September 2017 and that there be an “after party” event scheduled following each performance. Apparently, the request for after parties to be included in the contract was problematic. An “after party” is a function held in a nightclub or bar following a musical performance and is attended by the performer who receives an appearance fee. Apparently, members of the public may purchase tickets to these events and venue operators might make sizeable returns from them. The evidence before this Court established that venues operators were reluctant to accept bookings for such events unless they had a degree of certainty that the tour would proceed. Ms Spedaliere’s evidence was that venues had a practice of not accepting bookings for such events until the artist had posted on social media their intent to undertake a performance in the relevant locality. Mr Bellamy also gave evidence that they might not accept bookings until Mr Taylor had arrived in Australia, as some venues operators were apparently aware that Mr Taylor had previously been refused a visa to enter Australia.

18    In late May 2017, and in reliance on the alleged representations from Fifth Amendment and Mr Jones that the tour would proceed, Tour Squad reserved venue spaces for performances in Adelaide, Brisbane, Melbourne, Perth, Sydney, and Auckland. The extent to which those bookings were final and any amounts paid were refundable was not entirely clear. Ms Spedaliere gave evidence that there existed a system by which a venue might be reserved prior to a final booking being made, but that a fee was nevertheless payable to make the reservation. Additional shows were negotiated for Cairns and Canberra for late 2017. In addition, Tour Squad instructed its solicitors to prepare the relevant tour agreement.

19    On 23 May 2017, Mr Jones sent a message to Mr Bellamy informing him that he was “going the other way with Australia”. This apparently meant that he was considering not proceeding with the anticipated tour. It is perhaps not coincidental that shortly thereafter, on 31 May 2017, Mr Jones, in a text message, indicated that he required payment of between US$35,000 and US$40,000 per show for Mr Taylor, rather than the US$25,000 per show as had been discussed previously.

20    There were then further negotiations as to the amount to be paid to Fifth Amendment for the shows and as to the content of “hospitality riders”. The “hospitality rider” is a list of the particular food and refreshments and other accoutrements required by the artist for the purposes of the show. Its benefits apparently extend to the members of the artist’s “crew” or entourage as well. Tour Squad also ultimately made a concession and agreed to accommodate an additional ten persons as part of Mr Taylor’s crew on the tour.

21    After some further negotiation, the parties entered into a full tour agreement called “The Game ‘Last Tour Ever’ 2017” agreement (the Tour Agreement). It was signed by Mr Jones for Fifth Amendment and Mr Taylor on 12 June 2017 and executed by Ms Spedaliere for Tour Squad on 13 June 2017. The parties to the agreement were Tour Squad, Fifth Amendment and Mr Taylor by his pseudonym, “The Game”.

22    In the agreement, “Artist” referred to Mr Taylor, “Agent” or “Artist Management Agent” referred to Fifth Amendment, and “Promoter” or “Purchaser” referred to Tour Squad.

23    The preamble to the Tour Agreement provided:

THIS CONTRACT for the personal services of the Artist on the engagement described below is made on the date listed between the undersigned purchaser (herein called “Purchaser”) and the Artist (and their Agent on their behalf)

24    The agreement provided for the performance of seven shows in September 2017, six of which were in Australia and one in New Zealand. The compensation payable was US$25,000 per show. Personal appearances at clubs and other places were to be agreed upon.

25    The payment terms were as follows:

4.    PAYMENT SCHEDULE: All payments shall be paid by wire transfer, certified cheque, university cheque, money order, bank draft, or cash to the Artist Management Agent to be held and released in accordance with the terms of this agreement.

   a.     BINDER: USD $15,000.00: Paid and:

   b.     DEPOSIT: USD $2,000.00: Paid [for undelivered Artist Video Drop]

 c.     DEPOSIT BALANCE: 20%: USD $35,000.00: [less BINDER $15K, less DEPOSIT $2K = $17K]: USD $18,000.00. Upon execution of this agreement, payable no later than five working days after signing.

 d.     INSTALLMENT PAYMENT: 50%: USD $87,500.00 payable no later than Friday 18 August 2017.

 e.    BALANCE PAYMENT: 30%: USD $52,500.00 payable no later than Friday 1 September 2017.

   f.     OTHER PAYMENTS:

i.     Any public appearances [clubs, stores] to be confirmed between parties.

 g.    TAX: All payments shall be made in full without any deductions but for tax withholding on the undertaking that the Artist will supply a signed W-9 IRS form and tax witholding is not applicable.

 h.     SETTLEMENT: In the event that any “other” amounts are payable to The Artist arising out of the tour, the settlement of those additional amounts are to be paid by the Purchaser within 14 days at the end of the tour

26    One of the general terms in cl 5 concerned marketing and provided:

e.    MARKETING: The Artist agrees to allow the purchaser to call the tour “LAST TOUR EVER”. The Artist will provide the Purchaser with approved images, art and biographies to the Purchaser within 3 days of receipt of Deposit Balance. The Artist agrees to participate in social media marketing of the tour across the Artists official social media accounts on a regular and reasonable basis in the lead up to the tour, during the tour and to also participate in media interviews required by the Purchaser.

i.    Video Social Media obligations include:

a)    Video Drop: One video drop for the artist to break the announcement on his social media platform first for Tour Squad to share on a designated post date TBC by Tour Squad.

b)     Video Drop: One video drop for each city – Cities to be supplied within 3 Days of.

c)     Video Drop: Tickets on sale for Tour Squad to share - designated post date TBC by Tour Squad.

d)     Tour Squad to make a tour commercial for The Game to share on all social media.

   e)     All video posts must tag @TourSquad and #TourSquad

ii.    Posting Social Media Obligations include:

a)    Post # 1 for June: Tour Poster to follow video drop to be supplied by Tour Squad for Artist to break the news of the tour first on his social media - designated post date TBC.

b)    Post # 2 for June: JPEG post supplied by Tour Squad RE: Tickets on sale now - designated post date TBC.

c)     Minimum two posts bi-weekly to support the tour in July - designated post date TBC.

d)     Minimum two posts bi-weekly to support the tour in August - designated post date TBC.

e)    Minimum two posts bi-weekly to support the tour in September - designated post date TBC.

f)     All posts must tag @TourSquad and #TourSquad

27    Further, cl 5(p) and (q) provided:

p.    IMMIGRATION AND VISAS – The Purchaser shall be solely responsible for procuring and paying for, at no cost to the Artist, all work permits and visas required for the engagement for the artists and crew. The Artist, in turn, agrees to supply all personal information reasonably required in order to enable Purchaser to procure such work permits and visas. The Artist acknowledges that it is a material term of this agreement and specific requirement that the Artist is granted and holds the required visas to perform in Australia and/or New Zealand.

q.     VISA DOCUMENTS: The Artist agrees to provide all documents required, for all members of the Artist and Crew visas by 16 June 2017.

28    Pursuant to the terms of the Tour Agreement, Tour Squad made the following payments to Fifth Amendment (as the “Artist Management Agent” for Mr Taylor):

(a)    US$2,000 on 25 May 2017;

(b)    US$18,000 on 20 June 2017;

(c)    US$52,000 on 3 July 2017;

(d)    US$500 on 5 July 2017; and

(e)    US$13,000 on 5 July 2017.

29    Those payments were in addition to the amount of US$14,800 paid under the Binder Agreement which, by cl 4 of the Tour Agreement, was taken to have been paid pursuant to it.

Fifth Amendment and Mr Taylor failed to perform the agreement

30    By cl 5(e) of the Tour Agreement, Mr Taylor was obliged to provide images, art and biographies within three days of receipt of the “deposit balance” which was paid to Fifth Amendment on 20 June 2017. As deposed to by the directors of Tour Squad, the performance by Mr Taylor of his obligations was critical towards driving ticket sales for the performances as well as for the general success of the tour. Unfortunately, Mr Taylor failed to provide images, art and biographies three days after receiving the deposit balance or at all. Further, he failed to participate in any social media marketing of the tour across his official social media accounts. This left Tour Squad obliged to undertake marketing at its own expense and with material which it produced. It is worthy of comment that the respondents made no attempt to justify their failure to comply with their contractual obligations in this respect. They were clearly aware of them and simply chose to ignore them.

31    Further, by cl 5(p) and (q) of the Tour Agreement, Mr Taylor was obliged to provide Tour Squad with personal information for himself and the members of his crew in order that appropriate visas and work permits might be obtained for them. That information and all documents required for their visa applications were to be provided by 16 June 2017.

32    On 6 June 2017, Mr Bellamy received low resolution copies of Mr Taylor’s passports and those of his touring party from the tour manager, Ms Kimberly Ross-Jones. However, this information was insufficient and Tour Squad also required authorisations from Mr Taylor and his crew to allow it to make visa applications on their behalf. Mr Taylor apparently ignored his contractual obligations in this respect and, given the subsequent conduct of Fifth Amendment and Mr Jones, it is apparent that these breaches of contract were cynical.

33    On 25 and 26 June 2017, a text message exchange occurred between Mr Bellamy and Mr Jones in which the former sought from Fifth Amendment the signed visa authorisation forms as soon as possible. The response from Mr Jones was that if he did not receive all of his deposit the tour would not proceed. This was a somewhat bizarre statement as the evidence discloses that Tour Squad had paid the totality of the deposit by that time. Mr Bellamy responded by advising that all of the deposits were paid as per the schedule and that the next deposit was not due until 18 August 2017, at which time US$87,500 would be paid. Mr Bellamy’s reference to the payment being way of a “deposit” was in error. It was, in fact, an instalment payment and described as such under the Tour Agreement.

34    In an attempt to induce Mr Jones and Fifth Amendment to comply with their contractual obligations, Tour Squad offered to pay the instalment of US$87,500 due on 18 August 2017 by part payments of US$25,000 to be paid prior to 31 July 2017 and the remainder on 18 August 2017. That was rejected by a text message from Mr Jones to Mr Bellamy on 28 June 2017.

35    On 2 July 2017, Ms Spedaliere wrote to Mr Jones by email expressing the urgency and importance of receiving the information Tour Squad required in respect of the visa applications. The email also sought to have Mr Taylor perform his social media marketing responsibilities pursuant to the Tour Agreement. It is not clear whether this email elicited any response from Mr Jones.

36    In a further attempt to have the respondents fulfil their contractual obligations, Tour Squad offered to pay Fifth Amendment the sum of US$52,500 on 3 July 2017, even though it was not due to be paid until 1 September 2017. That was seemingly accepted and the amount was paid on or around 3 July 2017.

37    Mr Jones then intimated to Mr Bellamy that Mr Taylor would not attend in Australia to perform any concerts unless US$2,500,000 relating to an investment in a film documentary which he and Mr Bellamy were working on was paid to him. The connection between that arrangement and the tour by Mr Taylor, if any, is not particularly clear. It may be that there was no connection and Mr Jones was merely cynically refusing to perform the agreement in order to be paid further amounts. However, it appears that Mr Jones had capitulated somewhat by 17 July 2017 when he advised Mr Bellamy that he would send the authorisation forms to him so that the visas could be secured. Despite that assurance, those documents were not provided.

38    On 13 July 2017, the solicitors for Tour Squad sent an email to Ms Kimberly Ross-Jones advising of the further information required for the purposes of obtaining visas for Mr Taylor and his entourage. Unfortunately that request was also ignored. As Mr Bellamy deposed, between 17 July 2017 and 4 August 2017, Mr Jones and Fifth Amendment ceased communicating with Tour Squad in any meaningful way. The personal information and authorisations necessary to obtain the visas were not provided and nor was any marketing or promotional material.

39    From 4 August 2017, Mr Neild assumed the role of dealing with, or attempting to deal with, Mr Jones. These communications also took place via the WhatsApp messaging platform, although they did not progress very well. In those messages, Mr Jones variously said that:

(a)    he knew nothing about any tour of Australia by Mr Taylor;

(b)    Mr Taylor’s performance fee would be a minimum of US$40,000 per show over eight shows and there must be a minimum of eight after parties at a minimum of a US$15,000 appearance fee for each after party;

(c)    the tour was never solidified and no authorisations had been provided for Tour Squad to submit visa applications on behalf of Mr Taylor;

(d)    he never received any form of payment from Tour Squad in relation to the tour;

(e)    the payments received from Mr Bellamy related to a debt owed by him or related to an investment in a film documentary;

(f)    Tour Squad was in breach of the Tour Agreement by failing to obtain visa approvals before announcing the performances;

(g)    he was then only talking to Tour Squad to try to work things out;

(h)    he would not accept an increased offer of US$30,000 per show and the fee was US$40,000 per show;

(i)    he would accept US$35,000 per show and a minimum of seven after parties at a minimum of $US10,000 appearance fee per after party; and

(j)    finally, that he had no intention of allowing a tour by Mr Taylor in Australia.

40    On 8 August 2017, Mr Bellamy received a telephone call from a music promoter by the name of Phin Mackness (Mr Mackness) who advised that, on about 18 July 2017, Mr Jones had informed him that Tour Squad had breached its agreement by failing to pay a deposit by the due date and, on that basis, Mr Mackness was to replace Tour Squad as the promoter of the tour, cancel Tour Squad’s tour dates with the venues, and organise another tour with the same venues on alternative dates. Apparently, Mr Mackness thought that it was within his authority to do that and he corresponded with ticket sellers and informed them that the tour had not been agreed, and that Tour Squad had failed to make any payments to Mr Taylor.

41    On or about 22 August 2017, Mr Jones “livestreamed” a video via his Instagram profile. It is unknown how many persons did or are likely to have seen the video at that time or later. In the video, Mr Jones suggested that Mr Taylor would not be going to Australia until February 2018, if at all. He added that the promoter, being Tour Squad, was “janky”.

42    Mr Bellamy gave evidence to the effect that the expression “janky” was an Afro-American colloquialism which meant dishonest, disreputable, loathsome and a person with whom one should not do business.

43    On or about 6 September 2017, Mr Jones posted a photograph to his Instagram profile page with a caption about an apparently unrelated matter. In response to several “comments” about the tour to Australia and New Zealand by Mr Taylor from members of the public, Mr Jones commented that the tour was “fake” and that ticketholders should seek a refund.

44    On or about 6 September 2017, Mr Taylor uploaded a post to his Facebook profile page. He has approximately 8,100,000 “followers”. In his post, he advised that the tour of Australia with Tour Squad was a fake and that Tour Squad was janky.

45    On or about 13 September 2017, Mr Taylor made a further post to his Facebook profile page saying that he would not be coming to Australia to perform the tour.

46    Subsequently, Ms Spedaliere sought the assistance of a Mr Peter Seitz, who had been a former manager of Mr Taylor. In a series of emails sent on 9 and 10 September 2017, Mr Seitz sought to resolve the situation but to no avail. Mr Jones made a number of assertions in his emails, many of which were simply wrong and obviously so. However, it is apparent that he had determined not to undertake the tour because he regarded the amount being paid to Mr Taylor under the Tour Agreement as insufficient.

47    From the foregoing, it is pellucid that Fifth Amendment and Mr Taylor repudiated their obligations under the Tour Agreement. They evinced their clear and unequivocal intention not to be bound by its terms despite their extant obligations and their receipt of payments under it. It is also clear that they breached fundamental terms of the agreement and, it might be inferred, did so deliberately. However, as is discussed below, although Tour Squad’s case was advanced on the basis of, inter alia, breach of contract and repudiation of contract, nowhere in the pleading is it alleged that any breach was accepted by Tour Squad and nor is it said that it accepted any repudiatory conduct. Furthermore, no evidence was advanced that either of those events occurred.

Tour Squad’s claim

48    Tour Squad’s claim is founded on two causes of action. The first is that Fifth Amendment, Mr Jones, and Mr Taylor engaged in misleading or deceptive conduct by the making of false representations in contravention of Sch 2 of the CCA (the Australian Consumer Law), specifically s 18. It is alleged that the representations were made by Fifth Amendment through the agency of Mr Jones and that both Mr Jones and Mr Taylor were knowingly concerned in that conduct. Tour Squad seeks damages for the losses it sustained by reason of its reliance upon the misleading or deceptive conduct.

49    Alternatively, Tour Squad alleges that the respondents repudiated the Tour Agreement and/or breached their obligations under it. It is alleged that Mr Taylor failed to provide images, art and biographies within three days of the receipt of the balance paid on 4 September 2017 and failed to fulfil any of his obligations to promote the tour by social media. It is also alleged that he failed to provide Tour Squad with the necessary information for the obtaining of visas. Further, it is alleged that Mr Taylor breached cl 2 of the contract by failing to come to Australia and perform and appear in any of the seven scheduled live performances or otherwise perform the contract.

50    Reliance is also placed upon the repudiatory conduct of Mr Taylor on 6 September 2017 by, inter alia, asserting in a Facebook post that the tour was a fake, that he was not scheduled to tour Australia until 2018, and that Tour Squad was “janky”. It was further alleged that Fifth Amendment otherwise repudiated the Tour Agreement by engaging in conduct by which it evinced an intention not to be bound by its contractual obligations. This included, in particular, Mr Jones’s communications with Tour Squad’s representatives indicating that Mr Taylor had no intention of touring Australia as contracted and in which he refused to accept or acknowledge the existence of the Tour Agreement.

51    Tour Squad claims damages for breach of contract in the nature of its expectation losses, being the loss of the profit it would otherwise have made had the tour proceeded and reliance losses, being the amounts it paid under the contract and the additional costs which it incurred as a consequence of having to engage in conduct to remediate the repudiatory conduct of the respondents.

The respondents’ conduct in these proceedings

52    Prior to considering Tour Squad’s claim, it is necessary to say something of the respondents’ conduct in this matter.

53    Although each of the respondents was resident overseas, they were duly served with the proceedings. They entered an appearance by Australian solicitors and provided an address for service. Nevertheless, they regularly failed to provide their solicitor with any adequate instructions to allow him to attend to the substance of the action. In the course of the several Case Management Hearings, the Court made directions to progress the matter, including directions requiring the filing and service of a defence by the respondents. The respondents failed to file any defence by the required date with the consequence that an application for default judgment was made. It was set down for hearing on 25 September 2020. On that day, Mr Dillman of the respondents’ solicitors appeared and claimed that he finally had instructions to file a defence. As a consequence, the interlocutory application was dismissed although the respondents were ordered to pay the applicant’s costs in relation to it. The respondents subsequently filed a defence although, somewhat unfortunately, that was the extent of their participation in the action. Subsequent case management orders were made including a direction that the respondents file any affidavits on which they intend to rely at the trial. They were also directed to file a written outline of submissions. They complied with neither of those directions. At several Case Management Hearings, Mr Dillman appeared before the Court as a matter of courtesy, but was unable to assist the Court by reason of the absence of any instructions from his clients. Similarly, when the matter was called on for trial, Mr Dillman appeared but was once again bereft of instructions and, consequently, was excused from further attendance. He did however inform the Court that the instructions which he had received from time to time came from a person named Jacque L Shirley Esq of The Jacque L Shirley Firm, 5110 Sherbourne Drive, Los Angeles, California.

54    The relevance of this latter point is that, on 14 April 2021, Mr Shirley, rather inappropriately, sent a letter to my Chambers, without copying the solicitors for Tour Squad, in which he sought an “extension” – being an adjournment – on behalf of Fifth Amendment “in order for them to properly prepare a defense”. In the letter, he asserted that various circumstances had prevented Fifth Amendment from doing so and that:

If the Respondents are not allowed an extension of time there will be an appearance of the Respondents being railroaded through the Australian legal system.

55    Putting to one side the contemptuous conduct of attempting to influence a Federal Court judge by extra-curial communications and the appearance of attempting to practise law in Australia and, in particular, in the State of Queensland without being authorised to do so, the suggestion that the respondents were in any way being “railroaded” surpasses all understanding. They were accorded repeated indulgences through the interlocutory steps of this action. They had an Australian solicitor acting for them although on repeated occasions he was only able to tell the Court that he was unable to obtain instructions from them. If circumstances had prevented Fifth Amendment from preparing its defence, they existed well before the date of the hearing. At no earlier time was it suggested to this Court that anything other than the respondents’ refusal to engage with the litigation had prevented the giving of instructions and the preparation of a different defence. In any event, the sending of a letter by a person purporting to represent a litigant while simultaneously disclaiming being their legal representative was neither a proper nor adequate way of raising the issue.

56    Overall, the conduct by the respondents in these proceedings fell well short of that expected of any litigant. They dealt with the Court in a high-handed and dismissive manner. Nevertheless, despite their behaviour, they are entitled to and have the protection of the Australian legal system where appropriate. I reject most emphatically any suggestion that they have been denied any procedural fairness in this matter or otherwise been dealt with unjustly.

Consideration

Claim under the Australian Consumer Law

57    Section 18 of the Australian Consumer Law provides that:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

58    A contravention of that section entitles a party who has suffered loss and damage because of the contravention to recover the amount of that loss or damage: see s 236.

59    Tour Squad’s claim pursuant to s 18 is somewhat obscure. Indeed it is almost impossible to ascertain from the pleading and the written submissions filed in the Court. By paragraph 2 of the statement of claim, it is alleged that the representations “in relation to the fees that would need to be paid for [Mr Taylor] to perform an Australian tour” were made in text messages between Mr Bellamy and Mr Jones between 7 April 2017 and 1 June 2021. However, the substance and effect of the alleged representation is unstated. That is a most improper form of pleading and one to be deprecated. A pleading must inform the other party of the case they are required to meet. Where it is claimed that a misrepresentation has been made, its substance and effect must be clearly stated. It is not sufficient to identify a number of pieces of correspondence and require the party against whom the allegation is made to attempt to decipher the applicant’s case.

60    A further representation was relied upon by Tour Squad and appeared to arise out of the entry into the Binder Agreement. It is alleged that by doing so, Mr Jones and Fifth Amendment represented, for themselves and on behalf of Mr Taylor, that the tour would take place as generally indicated in the Binder Agreement, or that they presently intended that the tour would take place. It was submitted that these representations were misleading or deceptive because the subsequent conduct of Fifth Amendment, Mr Jones and Mr Taylor gave rise to the inevitable conclusion that the respondents never held an intention to be bound by the terms of any agreement entered into by the parties.

61    At the heart of this second claim of misrepresentation is the assertion that by entry into the Binder Agreement the respondents represented that they would provide the services to which the negotiations were directed. One only needs to articulate that proposition in order to discern how unlikely it is. It is a far from expected outcome that by entering into an agreement which, at its best, is little more than an agreement to negotiate the terms of a tour, the parties were representing that they would perform the tour generally in accordance with the terms ultimately reached. Nevertheless, that was the case advanced.

62    The evidence of Ms Spedaliere relating to the effect of entering into a binder agreement has been referred to above. So the submission goes, there was an implied term, arising through custom and usage, that the entry into it effectively bound the parties to proceed with the tour save in unexpected circumstances. At the very least, it seems to be suggested that by entering into it the respondents represented that the tour would proceed or that they intended that it would proceed. Confusingly though, Counsel for Tour Squad submitted at the hearing that Tour Squad’s case was that there were no real contractual obligations that arose from the Binder Agreement.

63    Ultimately, Ms Spedaliere’s evidence was not sufficient to support the conclusion that binder agreements in general were regarded by industry participants as being as good as final contracts and that parties would not depart from them save in exceptional circumstances. At its highest, the form of agreement in this case had the appearance of an agreement to negotiate although it is so poorly drafted that it is almost impossible to actually identify what it does. There is a distinct possibility that it is wholly ineffective to create any rights between the parties. In relation to the suggestion that it impliedly bound the parties, one must ask why, if that were the desired result, the parties entered into an agreement which appeared to have the opposite effect.

64    An issue with Ms Spedaliere’s evidence on this issue was that it tended to be inconsistent with other aspects of her evidence. In particular, she testified at the hearing that a binder was really an “in principle” agreement, entailing a degree of exclusivity of negotiations, which was put in place while such negotiations were conducted with respect to the terms of the final agreement. Nonetheless, she also asserted that Tour Squad would not have paid the Binder Fee to Fifth Amendment absent the understanding that the parties would be proceeding to a full tour agreement. This was consistent with Tour Squad’s case that it would not have subsequently incurred expenditure and liability in respect of the tour absent the representations alleged to have been made by Fifth Amendment by entering into the Binder Agreement.

65    To a degree it can be understood that a promoter would be somewhat unwilling to incur expenditure and liability in respect of a tour unless possessed of a high degree of confidence that the full contract terms will be finalised. However, the basis for such confidence need not necessarily be contractual in nature. Obviously enough, an agreement in principle as to commercial terms may engender an expectation that a further agreement would be entered into reflecting those terms. However, the real source of any confidence that a counter-party will enter into the further agreement and perform its obligations pursuant to such agreement may be non-legal considerations such as a relationship between the parties or their respective reputations. That is not to say that the entry into a preliminary agreement cannot entail the making of representations such as those which Tour Squad seeks to establish in this matter, but its limited legal force invariably limits what representations can be said to arise.

66    Another issue was the extent to which Tour Squad could demonstrate that any agreement as to the amount which Mr Taylor was to be paid per show was incorporated into the terms of the Binder Agreement. Despite the assertion in Mr Bellamy’s evidence that the Binder Agreement contained “the principal terms of the Parties’ agreement for the proposed tour”, arguably the most important of those terms, being the amount that was to be paid to Mr Taylor for his performances, was not stated. There was also nothing in the evidence that indicated that the figure of US$25,000 per show was actually agreed at the time of entering into the Binder Agreement. Rather, Mr Bellamy deposed that Mr Jones had messaged him to say that “he was not willing to discuss a tour until he received a “binder offer” and payment of a “binder fee” of $15,000.00 USD as proof that [Tour Squad] were serious about organising a tour”. Absent even an “in principle” agreement on price, the Binder Agreement could not be understood to give rise to any actionable representation that the tour would take place as indicated, or that Fifth Amendment and Mr Taylor intended that it would.

67    Ms Spedaliere’s evidence, taken by itself or together with Mr Bellamy’s, was not sufficient to establish any implied term derived from custom and usage arising from the entry into the Binder Agreement. In Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 (Con-Stan Industries), the High Court of Australia authoritatively stated the circumstances in which a term might arise by custom or usage as follows (at 236 – 237):

The circumstances in which trade custom or usage may form the basis for the implication of terms into a contract have been considered in many cases. The cases have established the following propositions:

(1) The existence of a custom or usage that will justify the implication of a term into a contract is a question of fact: Nelson v. Dahl (46). The critical dependence of a finding of custom on the facts of the particular case means there is little to be gained by referring (as counsel for the appellant urged us to do) to the practices of the London marine market in the last century, notwithstanding that those practices formed the basis for the implication, in contracts of marine insurance, of a term similar to the first of the terms alternatively contended for in this case: see Power v. Butcher (47); Xenos v. Wickham (48); Universo Insurance Co. of Milan v. Merchants Marine Insurance Co. Ltd. (49).

(2) There must be evidence that the custom relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract: Young v. Tockassie (50); Summers v. The Commonwealth (51); Majeau Carrying Co. Pty. Ltd. v. Coastal Rutile Ltd. (52). In the words of Jessel M.R. in Nelson v. Dahl (53), approved by Knox C.J. in Thornley v. Tilley (54):

“[The custom] must be so notorious that everybody in the trade enters into a contract with that usage as an implied term. It must be uniform as well as reasonable, and it must have quite as much certainty as the written contract itself.”

However, it is not necessary that the custom be universally accepted, for such a requirement would always be defeated by the denial by one litigant of the very matter that the other party seeks to prove in the proceedings.

(3) A term will not be implied into a contract on the basis of custom where it is contrary to the express terms of the agreement: Summers v. The Commonwealth (55); Rosenhain v. Commonwealth Bank of Australia (56). One explanation of this principle is that, in so far as it relates to written contracts, it is simply an application of the parol evidence rule, by which extrinsic evidence is generally inadmissible to add to, vary or contradict the express terms of a contract which has been reduced to writing: Bacchus Marsh Concentrated Milk Co. Ltd. (In liq.) v. Joseph Nathan & Co. Ltd. (57); Hoyt’s Proprietary Ltd. v. Spencer (58). A more fundamental explanation is that the presumed intention of the parties, on which the importation of the custom rests. (Produce Brokers Co. Ltd. v. Olympia Oil and Cake Co. Ltd. (59); cf. Treitel, Law of Contract, 6th ed. (1983), p. 164, must yield to their actual intention as embodied in the express terms of the contract, regardless of whether the contract is written or oral.

68    The most relevant criteria to the present case is the second. Whilst Ms Spedaliere and Mr Bellamy gave evidence of there being a degree of custom or usage in relation to the impact of binder agreements, that evidence fell well short of establishing that the custom relied upon is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported the term into the contract. Neither witness’ evidence traversed the whole of the industry and, in particular, the customs in the United States. It may well have been that Mr Jones considered the Binder Agreement operated, as it appears to on its face, as a mere agreement to negotiate in good faith and, perhaps, with the inclusion of some exclusivity of negotiations for a period of time. In the ordinary course, a party attempting to establish the existence of a term implied by custom and usage would obtain the opinion of an independent person suitably qualified by experience in the relevant market. Such evidence would usually descend into detail about the standard form agreements and the nature of any implied term. None of that existed in this case. It is apparent that no attention was given to the requirement of the second criterion stated in Con-Stan Industries and no attempt was made to establish that it was satisfied in the circumstances of this case.

69    The third criterion referred to in Con-Stan Industries would also present an insurmountable hurdle for Tour Squad. The Binder Agreement expressly provided that if no final agreement was reached by a particular date then the deposit would be returned unless the buyer agrees to extend. That clause is wholly inconsistent with the suggestion that, save in exceptional circumstances, the proposed tour would go ahead pursuant to the terms of a more fulsome agreement. Again, if the purpose of the binder was to effectively create reciprocal obligations, one can only wonder why it contained an express term to the contrary.

70    Although the discussion concerning the requirements in Con-Stan Industries is directed to the contractual effect of terms allegedly implied by custom and usage, they are equally applicable when considering any alleged implied representation.

71    It cannot be accepted in this case that the Binder Agreement included any implied term that the respondents would cause Mr Taylor to tour Australia and New Zealand in September 2017 save in exceptional circumstances. It is also not possible to draw from the circumstances of the case, any representation to that effect by the respondents from either the text messages or the entry into the Binder Agreement, or both.

72    It might also be observed that there was little utility in any such claim. In reality, the most that could have been said is that by entry into a properly drafted binder agreement, the parties agreed to negotiate in good faith to finalise an agreement for a tour. Here, an agreement was actually entered into such that any implied representation concerning the respondents’ intentions to do so would seem to have been true.

73    It follows that the claim based on misleading or deceptive conduct fails due to the absence of any operative representation.

Breach and/or repudiation of contract

74    On the evidence before the Court, there is no doubt that US$100,300 was paid by Tour Squad to Fifth Amendment pursuant to the Tour Agreement. Largely that was admitted on the pleadings.

75    Further, much of the conduct relied upon as constituting the respondents’ breaches of the Tour Agreement is admitted on the pleading, even if the allegation that the respondents breached the contract by engaging in that conduct was not.

Which parties were liable on the contract

76    The first important issue is as to the identity of the persons liable for breach of the agreement. This question may have been problematic save that, by paragraph 6(e) of the defence filed on behalf of the respondents, it was admitted that the Tour Agreement was signed by Mr Jones for and on behalf of himself, Fifth Amendment and Mr Taylor. Given the admissions as to the authority of Mr Jones and Fifth Amendment to bind Mr Taylor, it is sufficiently clear that Mr Taylor was a party to it and bound by its terms.

77    The contract is stated to be one for the provision of personal services of Mr Taylor and is said to be made by Tour Squad on the one hand and Mr Taylor on the other and Fifth Amendment on his behalf. Mr Jones executed the agreement on behalf of Fifth Amendment and it is sufficiently clear that it was bound by it. Further, cl VII of Sch A – Additional Terms and Conditions provided:

The person executing this agreement on purchaser’s or artists behalf warrants the authority to do so, and such a person hereby personally assumes liability for the relevant party’s obligations under this contract.

78    Here, Mr Jones executed on behalf of Mr Taylor and necessarily assumed the liability for its obligations. The respondents advanced no argument to the contrary.

79    Beyond doubt, the Tour Agreement is a poorly drafted document and it fails to specifically attribute the obligations to particular parties. Although Mr Taylor was bound by the agreement and by cl VII, Mr Jones assumed liability for their performance, it is somewhat vague as to the liability of Fifth Amendment. Although named as a party, it is not immediately apparent that it assumed responsibility for the performance of Mr Taylor’s obligations. It is not irrelevant than Tour Squad’s submissions did not address these issues.

80    Despite some hesitation, it can be inferred that as Fifth Amendment was expressly a party to the agreement, the parties’ intention must have been for it to procure the performance by Mr Taylor of the obligations under it. That inference is supported by Fifth Amendment’s role as Mr Taylor’s manager and agent. In those circumstances, it is appropriate to proceed on the basis that each of the respondents were liable for any default.

Repudiation

81    Tour Squad advanced its breach of contract case on the basis of actual breaches of contractual conditions and on the basis that the respondents had repudiated the agreement.

82    In relation to the latter, it alleged the respondents repudiated the Tour Agreement by:

(a)    asserting that the full amount of the deposit had not been paid;

(b)    Mr Taylor posting on his Facebook page on 6 September 2017 that the tour was a fake and the promoter was “janky”;

(c)    communicating to Tour Squad between 4 August 2017 and 20 September 2017 that Mr Taylor had no intention of touring Australia as agreed, and refusing to accept the existence of the agreement;

(d)    causing a third party, Mr Mackness, to contact ticket sellers and venue operators and advise them that there was to be no tour by Mr Taylor in 2017; and

(e)    demanding in excess of the amount due under the agreement.

83    The evidence adduced by Tour Squad supported the allegations made and it is sufficiently clear that, by their actions, the respondents evinced an intention not to perform the Tour Agreement at all, or in accordance with the agreed terms. Mr Jones’ constant denials in August and September 2017 that the deposit payments under the Tour Agreement had been made were, on the evidence before this Court, palpably false. The text messages he sent to Mr Neild were an attempt to obfuscate the issue and mislead, but more importantly, by denying the agreement and Tour Squad’s performance, the respondents evinced a clear intention not to be bound by it.

84    The same conclusion is reached in relation to Mr Jones’ text messages in which he denied the agreement’s existence. It is difficult to contemplate any more emphatic repudiation of an agreement than a complete denial of its existence.

85    To a similar extent, Mr Taylor’s posts on his Facebook page denying the tour’s existence, despite his contractual obligation to undertake it, evinced his clear intention not to perform the Tour Agreement.

86    If the above was not sufficient, Mr Jones’ attempt to have Mr Mackness cancel the ticket marketing and venue hire agreements for the tour was an unequivocal indication of his and the other respondents’ intention not to perform the agreement.

87    Although other matters were justifiably relied upon by Tour Squad as repudiation of the agreement, the conduct described above is more than sufficient to support the finding that such had occurred.

88    By reason of the respondents’ refusal and neglect to attend the trial of this matter, there was no contrary argument advanced that their breaches of contract did not amount to repudiatory conduct which Tour Squad was entitled to accept.

Did Tour Squad accept repudiation of the Tour Agreement?

89    Despite the respondents’ clear repudiation of the Tour Agreement, an issue arises as to whether Tour Squad accepted any such repudiation so as to bring it to an end. A repudiation alone does not have the effect of terminating the contract. Moreover, absent the discharge of the contract by termination for repudiation or breach, damages for loss of bargain will not be available.

90    There is no allegation by Tour Squad in the statement of claim that it did and the fact that it alleges the occurrence of continuing repudiatory conduct as at 11 September 2017 indicates that it did not do so prior to that date. There was also no evidence before the Court that Tour Squad expressly accepted the respondents’ repudiation. It did plead that Tour Squad demanded the return of the money which it had paid to Fifth Amendment which, if it had been proved, might have carried with it an implication that it had accepted the repudiatory conduct and brought the agreement to an end. However, despite the pleading, there was no attempt to prove that such a demand had been made. Whilst it commenced the present action in which it claimed damages for breach of the Tour Agreement on the basis that it was denied the benefits under it, that does not amount to an implicit assumption that it had accepted the contract’s termination consequent upon the respondents’ breaches. It might equally be assumed that Tour Squad misunderstood the requirement to accept a repudiation prior to seeking damages for the loss of bargain. That latter explanation seems more likely.

91    The acceptance of a repudiation is the election to terminate the performance of the contract at a time when the repudiation was operative.

92    In this case, the respondents’ initial repudiatory conduct was not retracted and nor was it excused. Nevertheless, Tour Squad through Mr Neild continued to press them to perform by sending the documents which would enable the securing of visas and the like. Although Mr Seitz was apparently engaged to attempt to resolve the issue with the respondents, nothing in the material relating to that was suggestive of the repudiation being accepted.

93    In the defence, the respondents asserted that they were not obliged to perform the agreement because of Tour Squad’s failure to make the instalment payment on 18 August 2017. The point sought to be made is that, despite the respondents’ multiple breaches and indication that the tour would not take place, Tour Squad could not recover damages for non-performance unless it had fully complied with its obligations to pay further sums to Fifth Amendment and Mr Jones. This might be taken as a defence to any claim advanced by Tour Squad for damages following the acceptance of repudiation.

94    However, the respondents’ defence is answered by reference to the well-known authority of Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235. There is no need to consider the facts of that case, and it suffices to say that it establishes that an innocent party’s further non-performance of an agreement after the other has repudiated it is no defence to an action for damages for breach. In effect, the defendant’s earlier breaches dispensed with the innocent party’s obligation to further perform obligations which would be futile. See also ICT Pty Ltd v Sea Containers Ltd (1995) 39 NSWLR 640 at 666 – 667 and Park v Brothers (2005) 222 ALR 421. In Foran v Wight (1989) 168 CLR 385, the principle was stated in the following terms by Mason CJ (at 395 – 396):

A failure by the innocent party to treat an anticipatory breach of an essential term as a repudiation and to terminate the contract has the effect of leaving the contract on foot, in which event it remains in force for the benefit of both parties, just as it would if the anticipatory breach had never occurred, subject to a qualification to which I shall refer in a moment. The parties then remain bound by the contract and the repudiating party may rely on any supervening circumstance which justifies his non-performance of the contract when the time for performance arrives … The qualification is that, if the repudiating party by his refusal to perform or other conduct intimates to the innocent party that he need not perform an obligation which is a condition precedent to the performance by the repudiating party of his obligation, and does not retract that intimation in time to give the innocent party an opportunity to perform his obligation, that party may be excused from actual performance of the condition precedent. The repudiating party then waives complete performance of the condition precedent and his conditional promise becomes unconditional.

95    In this case, the statements by the respondents that the tour would not proceed or that there was no concluded agreement had the consequence of intimating to Tour Squad that it was no longer required to fulfil its obligations under the agreement by paying the August instalment. The fact that Tour Squad had only paid a portion of the required amount would not have prevented it from suing for its loss of bargain under the agreement had it accepted the repudiation. Despite that, as matters transpired, at no time did Tour Squad accept the respondents’ repudiations and terminate the agreement. It follows that it cannot recover damages on that basis.

96    Shortly after the trial concluded, the parties were invited to make written submissions as to what the position would be if neither party had accepted repudiatory conduct by the other party. The respondents chose not to avail themselves of that opportunity. Tour Squad did so, although they did not address the topic on which the parties were given leave to make submissions. Instead, they purported to raise new and unpleaded instances of repudiation, such as the demanding of additional money for Mr Taylor’s performance of the Tour Agreement, Mr Taylor’s failure to perform his obligations in respect of marketing, and Mr Taylor’s failure to provide the information required in order for Tour Squad to obtain visas and work permits. These latter two matters were relied upon in the statement of claim as actual breaches of the agreement, but not as repudiatory conduct.

97    There was nothing in Tour Squad’s further submissions directed to whether it accepted any repudiatory conduct and terminated the agreement. That implicit admission that there was none supports the conclusion reached above.

Termination for breach

98    Tour Squad faces similar difficulties in relation to its claims for damages arising from the respondents’ alleged actual breaches of the Tour Agreement.

99    There is no doubt that the respondents breached a number of the contractual conditions which Tour Squad might have accepted for the purpose of terminating the agreement.

100    The breaches alleged by Tour Squad in its statement of claim include a failure by Mr Taylor to come to Australia and perform the required concerts, a breach of the obligation to attend in Australia for the required period of time, a failure to provide Tour Squad with images, art and biographies within three days after the receipt of the balance of the deposit, that was by 15 June 2017, and the failure to provide the necessary information required for the purposes of obtaining visas and work permits by 16 June 2017 or at all. It also alleged that the conduct of Mr Jones in posting statements that the tour was fake and Tour Squad was “janky” and that Mr Taylor would not be performing in Australia in 2017 were breaches of the agreement. In relation to that latter conduct, it can immediately be said that whilst it might have been repudiatory in nature, it did not necessarily breach any express or implied term of the Tour Agreement.

101    For the reasons which follow, the breaches by the respondents of cl 5(e), (p) and (q) of the Tour Agreement amounted to fundamental breaches on which Tour Squad was entitled to rely for the purposes of terminating the agreement.

102    First, the Tour Agreement was commercial in nature and one in which the respective obligations were reciprocal, mutual and correlative and which needed to be undertaken in a timely manner in order for the contractual objective to be achieved. In order to allow Tour Squad to obtain the benefit of the agreement, it needed to obtain the promotional material and the documents necessary for procuring visas and work permits within the timeframes specified.

103    Second, in the ordinary course, a clause which stipulates a time for performance will usually be regarded as a condition, the breach of which will entitle the other party to terminate. That is because the courts regard parties to commercial contracts as generally requiring a higher degree of certainty by imposing such requirements as well as heightening the consequences of their breach: Bowes v Chaleyer (1923) 32 CLR 159. The strict performance of the obligations in cl 5(e), (p) and (q) within the identified time limitations was implicitly assured by the nature of the contract and the object which it was intended to achieve. The tour was to occur approximately three months after the agreement was entered into and, undoubtedly, the parties would have to move quickly and in accordance with the time limits specified in the Tour Agreement to ensure that it would take place.

104    Third, a breach of those obligations by the respondents was likely to cause Tour Squad significant damages, if not the loss of the benefit of the agreement. The promotional art was required to successfully launch the tour, generate ticket sales, and give it momentum. The obligation to provide information and authorisation in relation to the visas and work permits was necessary to ensure that Tour Squad could obtain those permits and visas. The evidence indicated that this might take a matter of months with the result that performance in a timely fashion was needed if the appropriate entry authorisations were to be obtained in time for the tour to take place, and that the failure to obtain those authorisations would occasion commercial losses in relation to the booking of venues and other surrounding agreements.

105    The continued failure and refusal by the respondents to comply with the obligation to provide the promotional artwork and the documents necessary to obtain the visas and work permits fit comfortably within the description of “fundamental breaches” which entitled Tour Squad to terminate the agreement and sue for damages. It can be confidently concluded that Tour Squad would not have entered into the agreement without assurance of the strict performance of those obligations.

Was there termination of the agreement consequent upon the respondents’ breaches?

106    As is the case with the repudiation claims, there is no evidence that the alleged breaches of the Tour Agreement were accepted by Tour Squad so as to bring the contract to an end. Scant attention was paid by Tour Squad to this issue. Its pleading failed to specify any relevant act of termination although, conversely, the defence did not raise any defence to the effect that the claim for damages was not available by reason of the agreement’s non-termination. Tour Squad placed no evidence before the Court that it brought the agreement to an end. Indeed, the pleading asserts in paragraph 17(a) that the respondents breached the agreement by Mr Taylor failing to come to Australia or to perform any of the tour obligations. That allegation indicates that Tour Squad regarded the agreement as remaining on foot as at that time and, it necessarily follows, it had not terminated the agreement as at late September 2017. There is no allegation and no evidence that it did so any time thereafter.

107    The Originating Application and the Statement of Claim each seek relief for, inter alia, “Damages, including exemplary damages and loss of chance, for breach of contract”. That is supported by paragraph 27 of the statement of claim in which Tour Squad alleges it suffered damages which included the reliance losses incurred in the preparation of the tour and the expectation losses, being the loss of income which would have been recovered had the tour gone ahead. It is asserted in paragraph 28 that:

Had the Contract been performed and the Third Respondent provided the musical performances in accordance with the tour dates and obligations the Applicant would have enjoyed a substantial profit.

108    On occasion, it is possible to ascertain from the nature of the relief sought in an action that the commencement of the proceedings has the effect of accepting a breach of contract and terminating it. See the observations of Gibbs CJ in Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 547. However, in that case, the plaintiff had specifically sought a declaration that the contract had been terminated. No such relief is sought here. Although relief in the nature of damages for loss of bargain are claimed, that does not give rise to any implication that Tour Squad had accepted the respondents’ breaches and terminated the agreement.

109    Neither was there any evidence that Tour Squad purported to terminate the Tour Agreement as a result of the respondents’ breaches.

110    The necessary result of the agreement remaining on foot (or, as is perhaps the case, having been abandoned) is that loss of bargain damages are not recoverable. So much was made clear in Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 where Mason CJ said (at 260 – 261):

Loss of bargain damages are recoverable only if the contract is at an end. Once termination due to the defendant's wrongful conduct is established the plaintiff is entitled to damages for loss of bargain: Dominion Coal Co. Ltd. v. Dominion Iron & Steel Co. Ltd. Barwick C.J. suggested in Ogle, that termination is not an essential element in an action for loss of bargain damages, except in the case of anticipatory breach, but the preponderant opinion in Australia and England is against his view: see Ogle, per Gibbs, Mason and Jacobs JJ.; Progressive Mailing House Pty. Ltd. v. Tabali Pty. Ltd, per Mason J. (with whom Wilson and Deane JJ. agreed generally, and Dawson J. agreed); Photo Production Ltd. v. Securicor Ltd.

(Footnotes omitted).

111    It necessarily follows that relief for loss of the bargain under the Tour Agreement is not available.

Damages

Reliance losses

112    For the reasons stated above, the only damages which are available to Tour Squad are the reliance losses which it suffered consequent upon its attempted performance of its obligations pursuant to the Tour Agreement. Unfortunately, little attention was given to establishing what that amount actually was or how it should be calculated.

113    In the course of her evidence, Ms Spedaliere indicated that various expenses were incurred in the course of preparing for the tour by Mr Taylor, including the payments to Fifth Amendment and paying deposits on the hiring of venues and the like. Unfortunately, no attempt was made to quantify those amounts in her evidence and the only reliance loss which could be directly quantified from what she said was the amount paid to Fifth Amendment, being US$100,300.

114    Tour Squad’s reliance losses can be more completely quantified by reference to a report of Mr Michael J Lee, a forensic accountant of Vincent’s Accounting. That report detailed the loss of profits which Tour Squad sustained as a result of the respondents’ non-performance of the Tour agreement. Annexure 9 of that report sets out a statement of the expenses incurred by Tour Squad in respect of the tour as at 31 October 2017. Presumably, this was prepared by Tour Squad or its accountants and provided to Mr Lee. Ms Spedaliere deposed that the information provided to Mr Lee in respect of its losses was true and correct. This was a rather poor method of proof, but was nonetheless adequate in the absence of any evidence or submissions by the respondents.

115    The statement annexed to the expert report satisfies the Court that the amounts set out in the following table (which are expressed in Australian dollars) were incurred by Tour Squad in the performance of its obligations:

116    Having calculated the amounts incurred by Tour Squad, it then necessary to take into account any amounts of revenue it did receive despite the repudiation and breaches of the Tour Agreement by the respondents. In this regard, the evidence in the expert report was that Tour Squad earned the amount of $32,477. This primarily comprises the amount of $32,476 that it received by “selling off” the ticket sales relating to the performance in Perth to a third party who took on risk in respect of selling those tickets.

117    The totality of the damages to which Tour Squad has established an entitlement in these proceedings is $478,119.73, being the net of the two amounts detailed above.

Expectation losses

118    As was explained above, in the absence of establishing any acceptance of a repudiation of the Tour Agreement or its termination consequent upon the respondents’ breaches, Tour Squad is not entitled to recover any damages for loss of profits. However, in case the above analysis is wrong, it is appropriate to assess damages on the basis that it is entitled to recover them.

119    In that regard, the unchallenged evidence of Mr Lee establishes the loss of profits which Tour Squad sustained as a result of the respondents’ breaches of contract. In his report, he analysed the key variables involved in conducting the tour contemplated by the Tour Agreement which included the percentage of ticket sales, the capacity of each venue, the expenses associated with the income stream forecasts, and any additional costs. As was mentioned above, his financial analysis was based upon information provided by Ms Spedaliere who deposed it to be true and accurate.

120    Mr Lee analysed the financial information on both the Specific Costs method and the Discounted Cash Flow method. He performed this analysis under three alternative scenarios. The first being 100% of the tickets sold, the second being 85% of the tickets sold, and the third being 75% of the tickets sold. In this latter respect, Ms Spedaliere gave evidence that she believed the tour would be successful and result in “sell out” concerts at each of the venues. Necessarily, the success of the concerts would flow over to the after party events. In the absence of any contradictory evidence, Ms Spedaliere’s assessment of the likely success of the tour may be accepted. In doing so, her evidence that this form of entertainment is currently one of the most popular in the world may also be taken into account. On the basis that 100% of the tickets were sold, Mr Lee assessed Tour Squad’s loss of profit at $897,451.

121    In those circumstances, Tour Squad has proven that, had the contract been terminated by acceptance of repudiatory conduct or terminated for breach and loss of bargain damages been available, the amount of that loss of bargain would be in the sum of $897,451. It is relevant to note that this measure of damages is in the alternative to the damages calculated above. The figure of $897,451 takes into account the total loss of cash flows resulting from the respondents’ repudiation and breach of the Tour Agreement, including the amount of reliance losses calculated above.

Interest

122    Tour Squad seeks interest on its losses although its submissions provided no assistance in this regard. It can be assumed that the losses were fully sustained by 3 July 2017. Interest is available pursuant to s 51A(1)(a) of the Federal Court of Australia Act 1976 (Cth) and pursuant to the Interest on Judgments Practice Note is allowable at 4% above the relevant Reserve Bank cash rate. Tour Squad chose not to adduce any evidence of the cash rates from time to time. In those circumstances, interest will be allowed at 4% per annum from 3 July 2017 to the date of judgment. On those figures, the interest payable as at the date of this judgment is $74,508.08.

Costs

123    Tour Squad also seeks an order that the respondents pay their costs of the action. In this Court, as in most courts in Australia, the losing party is usually required to pay the costs of the successful party. There are no circumstances in this case why the usual rule should not be followed. The appropriate order is that the respondents pay the applicant’s costs of the action, including reserved costs, if any. No order was sought, as it might have been, that the respondents pay costs on an indemnity basis. That being so, they are to be paid on the standard basis.

Postscript

124    It is, unfortunately, necessary to make several observations concerning the conduct of this matter by Tour Squad and the manner in which it advanced its case in this Court.

125    On a practical level, there was little, if any, attempt by Tour Squad to articulate its case in any reasonably coherent manner, or to even order and arrange the facts in any logical or comprehensible manner. Rather, material was merely tendered to the Court with the apparent intimation it was for the Court to ascertain the relevant facts for itself without any further assistance. Further, Tour Squad’s written submissions were advanced at a very high level of generality and abstraction with no effort made to properly identify the evidential support in the affidavits or transcript of the hearing for the assertions made. Even in cases which are not defended at trial, the Court is entitled to expect that parties provide a logical framework in which their case might be understood. Indeed, in those cases where there is no contradictor at the hearing, it is all the more necessary that the remaining party provide the assistance necessary for the Court to understand the arguments being advanced.

126    It should also be observed that the principal affidavits relied upon by Tour Squad featured language which was substantially the same or even identical in many paragraphs. The most egregious instance of this was a paragraph of the affidavits of Ms Spedaliere and Mr Bellamy which was in identical terms and, in the case of Ms Spedaliere, referred to herself in the third person. When questioned on this, although Ms Spedaliere initially asserted that she did prepare her own affidavit, she subsequently conceded that she only prepared a detailed “chronology matrix” from which her affidavit was prepared and may have referred to the other affidavits in preparing that matrix. It is to be noted that she did specifically deny having agreed with Mr Bellamy and Mr Neild what should go in the affidavits. Ultimately, the explanation for the similarities appears to lie with Tour Squad’s solicitor, Mr Tarabay, who gave evidence that he was responsible for drafting the affidavits of Ms Spedaliere, Mr Bellamy and Mr Neild, and prepared them by reference to Ms Spedaliere’s matrix.

127    Taken as a whole, the three principal affidavits relied upon by Tour Squad create the impression that an affidavit was created by Tour Squad’s solicitors for one of the deponents, which was then altered for each of the other deponents. If this was how the affidavits were prepared, such a practice is to be deprecated. As Palmer J observed in Macquarie Developments Pty Ltd v Forrester [2005] NSWSC 674 [90], affidavit evidence which is in the same words is suggestive of collusion or otherwise leads to the impression that the person drafting the affidavit has not used the actual words of the deponents. In the latter case, there is a heightened risk that a deponent swears or affirms to the truth and correctness of matters which are actually outside their knowledge or belief. On a more practical level, the way in which the affidavits were prepared in this case meant that they included many paragraphs that were inadmissible because, for example, direct evidence of communications in one affidavit was re-worded in the other affidavits as inadmissible hearsay evidence of what the party to those communications had told the other deponents about the communications.

128    Finally, I was informed by my Associate that the solicitor for Tour Squad, Mr Tarabay, contacted my chambers by telephone on two occasions after the hearing on 15 April 2021. Each instance was the subject of a contemporaneous file note. On 7 May 2021, he inquired of my Associate whether the Court required any further information or material and also as to when final judgment would be delivered. This was three weeks after the hearing. The former request was rebuffed by my Associate and, fortunately, no information or material was received. Mr Tarabay was also informed at that time that it was not my practice to advise parties of when judgment would be delivered before a matter is listed for judgment. Despite that, I have been further informed by my Associate that Mr Tarabay contacted my chambers on 19 May 2021 to again request an indication of when judgment would be delivered.

129    These communications were improper. It is explicitly stated in the Court’s Central Practice Note that it is inappropriate to contact a judge’s chambers to enquire about a reserved judgment. The Practice Note also makes clear that communications with chambers should be open and uncontroversial. This generally requires that communications be in writing and with the prior knowledge or consent of all other parties. It is not necessarily inappropriate to contact chambers by telephone, but the subject matter of the communications was not such that they were appropriately made in that manner, particularly as they should not have been made at all.

130    It was of much greater concern that Mr Tarabay was, apparently, offering to provide further information and material to the Court without the apparent knowledge or consent of the other parties to the proceeding. This was highly improper. The reason for limiting communications with chambers in the manner described above is that, except in rare circumstances, proceedings are to be undertaken in open court with all parties being afforded the opportunity to be heard. A party who communicates with the Court in the absence of the other parties outside of the limited circumstances in which it is appropriate to do so risks undermining the confidence in the impartiality of the Court: see Re JRL; Ex parte CJL (1986) 161 CLR 342 at 346 [4]. Indeed, such communications may be a criminal contempt of court if they tend to interfere with the administration of justice by scandalising the Court, even if they were made without any intention of so interfering with the administration of justice: see McGuirk v University of New South Wales [2009] NSWSC 1058 at [239] – [247].

131    In certain circumstances, a party communicating with the Court without the knowledge of the other parties may give rise to a reasonable apprehension of bias. In relation to similar circumstances, the Full Court in John Holland Rail Pty Ltd v Comcare [2011] FCAFC 34 (John Holland) stated:

12    The rule is that a judge should not receive any communication from anyone concerning a case that the judge is to decide, made with a view to influencing the conduct or outcome of the case. See, for example, Re JRL; Ex parte CJL (1986) 161 CLR 342 (“Re JRL”) at 346 (Gibbs CJ) and 350 (Mason J), both citing Kanda v Government of Malaya [1962] AC 322 at 337 and Reg. v Magistrates’ Court at Lilydale; Ex parte Ciccone [1973] VR 122 at 127. In this context, communications made by one party without the knowledge of the other are governed by the principle that a judge should disqualify himself from hearing a matter where a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the issues in the case: Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 (“Ebner”) at 344; British American Tobacco Australia Services Ltd v Laurie (2011) 273 ALR 429; [2011] HCA 2 (“British American v Laurie”) at 464-5, [139]-[140]; Re JRL at 351. This is the apprehension of bias principle.

…

22    As already stated, the authorities do not support the proposition that there is any necessary impropriety if a party or practitioner communicates unilaterally with a judge’s chambers. Whether or not such a communication is improper depends on all the circumstances, including, principally, its nature, subject matter, and perhaps, its sequence and extent. There is no impropriety in a party’s unilateral communication with chambers in relation to procedural, administrative or practical matters, although a sustained sequence of communications not circulated to the other parties, even in relation to matters of this kind, could, at a certain point, become unprofessional or improper in the absence of some good reason: see, for example, Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 540.

23    On the other hand, save in the unusual circumstances warranting an ex parte application, it is clearly improper for parties or their practitioners to attempt to communicate unilaterally with a judge’s chambers in relation to the substantive issues in the litigation. Every communication of this kind must be circulated to, or made in the presence of, the other parties (unless the other parties have previously consented to its unilateral communication to the judge: see Fisher at 352). Breach of that principle is not only an impropriety on the part of the party making the communication but may, in certain circumstances, found, or be a factor contributing to, a reasonable apprehension of bias, alternatively, lack of procedural fairness, on the part of the judge. It does not follow from this, however, that the mere making of a unilateral communication raises a presumption of impropriety (as John Holland’s argument assumed), thereby casting on the parties involved (including the practitioner, chambers staff who received or engaged in the communication and, in some cases, the judge) an onus to prove the contrary by means of affidavit or a similar level of proof. In the present case, moreover, the mere fact that Comcare’s solicitor declined to make an affidavit setting out his conversation with the judge’s associate could not make out a case for apprehended bias that did not otherwise arise.

132    In this case, it is to be emphasised that no further material or information was provided to the Court by Tour Squad or its solicitors. In the circumstances, I consider that the communications by Mr Tarabay, including the apparent offer to provide such material or information, cannot of themselves give rise to a reasonable apprehension of bias: see John Holland at [12] and the cases there cited.

133    As was mentioned above, there was a similar attempt by a representative of one or more of the respondents to communicate with and, apparently, to influence the Court. This does not lessen the impropriety of Mr Tarabay’s communications and I consider his communications to be a more serious matter as they were made by an Australian legal practitioner. I do not venture to comment on the standards of legal practitioners in other countries, but, as officers of the Court, high ethical standards are expected of Australian legal practitioners.

Associate:    

Dated:    25 May 2021