Federal Court of Australia

Commens t/as Subsonic Music v Certain Lloyd’s Underwriters subscribing to Policy No ALTCNX1900332 (Trial Judgment) [2024] FCA 434

ORDERS

THE COURT ORDERS THAT:

1.    The separate questions be answered as follows:

Question 1: Was the cancellation or abandonment of the 2019 Subsonic music festival:

(a)    necessary; and

(b)    the sole and direct result of a cause

(i)    not otherwise excluded by the policy of insurance issued by the respondent to the applicant; and

(ii)    beyond the control of the applicant and the participants, as defined?

Answer: No.

Question 2: If not, does s 54 of the Insurance Contracts Act 1984 (Cth) prevent the respondent from refusing to pay the claim?

Answer: No.

Question 3: Is the respondent liable to reimburse the applicant for such net loss as may be determined following the cancellation of the 2019 Subsonic music festival?

Answer: No.

2.    The originating application be dismissed.

3.    The applicant pay the respondents’ costs of the proceedings.

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

REASONS FOR JUDGMENT

JACKMAN J:

Introduction

1    In these proceedings, the applicant, Mr Commens, claims indemnity pursuant to an Event Cancellation insurance policy numbered ALTCNX1900332 insuring Scott Commens trading as “Subsonic Music” (Policy). The respondents are the Lloyd’s Underwriters subscribing to the Policy (Insurers). I address the terms of the Policy in detail below, however I note at this point that the “event” which is the subject of the Policy was the “Subsonic” music festival to be held on 5–9 December 2019 at a property known as “Riverwood Downs”. The 2019 Subsonic music festival did not occur or commence at that venue in that period.

2    Riverwood Downs is a rural property situated approximately two and a half hours’ drive north of Sydney. It is owned by Mr Christopher Hall jointly with his wife, and run by Mr Hall with his daughters, Rachael Carroll and Toni Hinshelwood, as a rural retreat providing accommodation.

3    At the heart of Mr Commens’ case is the proposition that the 2019 Subsonic music festival was cancelled because of bushfires which were burning in the Mid North Coast region of New South Wales during November 2019. Mr Commens also advances an alternative case that the cancellation was the result of extreme weather conditions, being drought conditions affecting the area.

4    On 16 November 2023, I ordered that three questions be determined separately from and prior to all other questions in the proceedings, consistently with the usual practice in the conduct of this Court’s Insurance List, and over the opposition of the Insurers: Commens t/as Subsonic Music v Certain Lloyd’s Underwriters Subscribing to Policy No ALTCNX1900332 [2023] FCA 1434. The separate questions are as follows:

Question 1:     Was the cancellation or abandonment of the 2019 Subsonic music festival:

(a) necessary; and

(b) the sole and direct result of a cause

(i)    not otherwise excluded by the policy of insurance issued by the respondent to the applicant; and

(ii)    beyond the control of the applicant and the participants, as defined?

Question 2:     If not, does s 54 of the Insurance Contracts Act 1984 (Cth) prevent the respondent from refusing to pay the claim?

Question 3:    Is the respondent liable to reimburse the applicant for such net loss as may be determined following the cancellation of the 2019 Subsonic music festival?

Salient Terms of the Policy

5    By the insuring clause of the Policy, and subject to its other terms, the Insurers promised relevantly as follows:

We will reimburse you for the net loss following the necessary cancellation, abandonment, disruption or rescheduling of the event, which is the sole and direct result of a cause not otherwise excluded which occurs during the period and is beyond your control and the control of the participants.

6    The “period” was from 18 January 2019 to 11 December 2019.

7    The “event” is as described in the schedule and held at the “venue”, which is defined as:

The place(s), building(s) or such other structure(s) stated in the schedule where the event is to be held as well as accommodation, any services and utilities which are essential to the event taking place.

The place stated in the schedule (identified as “Event Venue”) is “Riverwood Downs, 311 Upper Monkerai Valley Road, Monkerai, NSW”.

8    The Policy defines “cancellation” to mean the “inability to commence with the event”. The term “abandonment” is defined as the “inability to complete the event once commenced”. The term “disruption” is defined as the “unavoidable partial closure of the event”. The term “rescheduling” is defined to mean the “unavoidable postponement of the event to another time or the unavoidable removal of the event to another location”. As indicated above, Question 1 only uses the terms “cancellation or abandonment”. That was further narrowed by the applicant’s counsel during his opening address to “cancellation”, as “abandonment” in the defined sense was accepted to be inapplicable (T6.37–47).

9    The term “participants” is defined as:

Any party who is contracted by you to perform a function critical to the successful fulfilment of the event.

There is a question as to whether Mr and Mrs Hall as the owners of Riverwood Downs were “participants”. However, there is no evidence that they ever entered into a contract with Mr Commens, whether oral or written, to perform any function in relation to the 2019 Subsonic festival. A written contract was prepared but never signed (CB 1/92–106 and Supp CB 1/520–26), and there is no evidence of the parties entering into any oral contract. Counsel for the applicant submitted that the word “contracted” should be construed more broadly than requiring that a legally binding contract be entered into, and akin to “engaged” (T10.36 –11.31). However, that is not the ordinary and natural meaning of “contracted” and in my view there is no reason why the proper construction of the word should not be consistent with its ordinary and natural meaning.

10    Exclusion 5 excluded cover for any loss directly or indirectly arising out of, contributed to by, or resulting from adverse weather in respect of any event in the open or under canvas or in a temporary structure unless agreed by the Insurers in writing and stated in the schedule. That exclusion was deleted from the policy wording by the adverse weather endorsement, which also added the following definition to the Policy:

Adverse weather as insured by this policy is defined as extreme weather conditions which:

a)    occur on the day(s) of the event and which are deemed by the event organiser on the day of the event to pose a serious threat to the safety of those attending the event;

and/or

b)    occur during the policy period and which result in conditions which the Local Authority considered to pose a serious threat to the safety of those attending the event;

and/or

c)    occur during the policy period and which prevent you or event organisers from undertaking the necessary set up to enable the event to proceed due to:

ii)    concern for the safety of those responsible for the necessary set up, or;

iii)    reasons of physical impossibility.

In any claim and/or action, suit or proceeding to enforce a claim for a loss hereunder the burden of proving that the loss results from adverse weather shall fall upon you.

All other terms and conditions per the policy wording.

11    The exclusion clauses include the following provisions:

This policy does not cover any loss directly or indirectly arising out of, contributed to by, or resulting from:

…

8.    Your failure to:

a)    observe and comply with the requirements of any law, ordinance, court or regulatory body of whatever jurisdiction.

b)    make all necessary arrangements for the successful fulfillment of the event (which for the avoidance of doubt shall include, but not be limited to, the provision of sufficient allowances for travel time, set up and/or rehearsal time) in a prudent and timely manner.

c)    ensure that all necessary contractual arrangements with you are made and confirmed in writing with you and that all necessary authorisations, (which for the avoidance of doubt shall include, but not be limited to, the obtaining of licences, permits, visas, copyright and patents) be obtained in a timely manner and valid for the period of event.

…

16.    Lack of or inadequate receipts, sales or profits of any venture, lack of or inadequate response or inadequate financial or other support or withdrawal of such support from any party, lack of or inadequate attendance or insufficient interest prior to the date and time scheduled for any event.

Construction of the Policy

12    The principles of construction of commercial contracts were summarised by French CJ, Nettle and Gordon JJ in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 relevantly as follows:

(a)    the rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose: at [46];

(b)    in determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean, and that enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract: at [47]; and

(c)    unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption that the parties intended to produce a commercial result, or put another way, a commercial contract should be construed so as to avoid it making commercial nonsense or working commercial inconvenience: at [51].

13    The principles concerning the construction of commercial contracts apply to contracts of insurance: Todd v Alterra at Lloyd’s Limited [2016] FCAFC 15; (2016) 239 FCR 12 at [42] (Allsop CJ and Gleeson J). As Allsop CJ and Gleeson J said in that case at [38], a contract of insurance has the object or purpose of sharing the risk of, or spreading loss from, a contingency. In my view, that object or purpose necessarily involves identifying the risks that the insurer has agreed to cover, and those which it has excluded. Further, in construing an insurance policy, preference is to be given to a construction supplying a congruent operation to the various components of the whole: Wilkie v Gordian Runoff Limited [2005] HCA 17; (2005) 221 CLR 522 at [16] (Gleeson CJ, McHugh, Gummow and Kirby JJ).

14    The insuring clause and exclusion clauses must be read together in a harmonious way so that due effect is given to both, and the right conferred by the former is not negated or rendered nugatory by the construction adopted for the latter. In relation to the construction of exclusion clauses, such a clause is to be construed according to its ordinary and natural meaning, read in the light of the contract as a whole: Hakea Holdings Pty Ltd v Neon Underwriting Ltd [2023] FCAFC 34; (2023) 296 FCR 611 at [103]–[104] (Jackman J, with whom Colvin and Button JJ relevantly agreed); Star Entertainment Group Ltd v Chubb Insurance Australia Ltd [2022] FCAFC 16; (2022) 400 ALR 25 at [14] (Moshinsky, Derrington and Colvin JJ).

15    As to the contra proferentem rule, the rule is to be applied only as a last resort after the orthodox process of construction has failed to resolve an ambiguity, and it is not a rule which may be applied to resolve “any ambiguity”: LCA Marrickville Pty Ltd v Swiss Re International SE [2022] FCAFC 17; (2022) 290 FCR 435 at [83]–[102] (Derrington and Colvin JJ, with whom Moshinsky J agreed); Hakea Holdings Pty Ltd v Neon Underwriting Ltd at [105] (Jackman J, with whom Colvin and Button JJ relevantly agreed).

16    As to the approach to be taken to the construction of clauses which use a defined term, in Halford v Price (1960) 105 CLR 23 at 28 (Dixon CJ, with whom Menzies and Windeyer JJ agreed) and 32–33 (Fullagar J), the High Court adopted the orthodox technique of incorporating the defined term into the operative text of the clause, effectively by rewriting the operative words of the clause with the language used in the definition of the particular term. However, as Fullagar J said (at 33), there is no rule of law or of construction which requires the court to apply a definition where to do so would be at variance with the context or with the general intent to be gathered from the whole of the document. Nothing in the reasoning of the High Court suggests that the approach taken in that case is the only available approach to the construction of a clause employing a defined term. In particular, in my view, the choice of the term which is given a specific definition in the contract itself has a role to play in the construction of the clause, which is perhaps obscured by the technique of construction adopted in Halford v Price of simply incorporating the definition into the substantive clause. Defined terms in a commercial contract should not be treated as akin to algebraic symbols, but rather are labels which are seldom arbitrary and are usually chosen as a distillation of the meaning or purpose of a concept intended to be more precisely stated in the definition: Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] 2 AC 1101 at [17] (Lord Hoffmann). This point has particular significance in relation to the insuring clause in the present case, as I explain in the next paragraph.

17    There is an awkwardness in the language used in the insuring clause of “necessary cancellation”. If one adopts the literal approach used in Halford v Price, the expression becomes “necessary inability to commence with the event”. As the Insurers submit, and I accept, necessity is not something which naturally qualifies an inability to do something. The jarring effect of the language, however, can be resolved by recognising that the particular terms which are used in the insuring clause of “cancellation, abandonment, disruption or rescheduling” all involve decision-making, and decisions may be either necessary or merely prudential and discretionary. In their closing addresses, counsel for both parties accepted that “the necessary cancellation” should be construed as the necessity of deciding to cancel on the ground, which is objectively established, of the inability to commence with the event (T229.49–230.11; 241.38–46). I accept that that is the proper construction of the term. The applicant submits, and I accept, that the matter must be assessed at the time the decision is made (T7.40–46).

18    Accordingly, the question whether there was a “necessary cancellation” involves both the objective question as to whether the relevant cause made it necessary to decide not to commence with the event, and the subjective question whether that cause was the ground actually used in making that decision. There are thus three factual issues to be addressed:

(i)    who made the decision not to commence the event and when was that decision made;

(ii)    was there at that time, as a matter of objective fact, an inability to commence with the event which made it necessary to make the decision not to commence with the event; and

(iii)    was the reason for that inability the actual ground used in making the decision?

19    If, having answered those questions, there was a “necessary cancellation”, the questions arise as to whether the necessary cancellation was the “sole and direct” result of a cause:

(i)    not otherwise excluded which occurs during the period; and

(ii)    beyond the control of the insured and of the participants.

The applicant submits, and I accept, that “direct” means “proximate” in terms of efficiency, and does not mean immediate: Lasermax Engineering Pty Ltd v QBE Insurance (Australia) Ltd [2005] NSWCA 66; (2005) 13 ANZ Ins Cas 61–643 at [82]–[83], [102] (McColl JA, with whom Ipp and Tobias JJA agreed). In light of the factual findings which I have made below, it is not necessary for me to consider the proper construction and application of the word “sole”.

Salient Documentary Evidence

20    “Riverwood Downs” is a 650-acre property located at 311 Upper Monkerai Road, Monkerai in New South Wales. The property is on the banks of the Karuah River. It was purchased by Christoper Hall and his wife in 1980.

21    Riverwood Downs Holdings Pty Ltd (RWD Holdings) carried on a rural retreat accommodation business from Riverwood Downs, including with an onsite bar and restaurant. From 2005, Mr Hall’s daughters, Rachael Carroll and Toni Hinshelwood, took over the business, however Mr Hall remained a shareholder in RWD Holdings and continued to be actively involved in the day-to-day running of the business. It appears that from 2005, RWD Holdings owned at least one of the parcels of land comprising Riverwood Downs. Another parcel appears to have been owned by Ms Carroll and Peter Ashley Carroll from 2003. From 2009, Mr Commens held the Subsonic music festival at Riverwood Downs.

22    On 20 November 2014, the Great Lakes Council determined to modify the development consent approving the use of Riverwood Downs to hold the festival for the years from 2014 to 2018: CB 3/822. The approved use thereunder was restricted to 5,000 patrons at any time.

23    The Subsonic music festival was thereafter held at Riverwood Downs until 2018. There was a Venue Hire Agreement for the 2018 festival between RWD Holdings and Mr Commens: CB 1/67. It described RWD Holdings as the registered proprietor of Riverwood Downs, but also defined the “Owner” to include both that company and “RJ & PA Carroll and CJ & VE Hall” (by the definition of “Associated Entities”). The event the subject of the Agreement was described as a four-day camping and music festival from 30 November to 3 December 2018, with “bump-in” and “bump-out” periods either side of those days. Those terms may be taken to refer to the period of works to prepare the venue for the event and to reinstate it following the event. In his Concise Statement, Mr Commens says that “bump-in” is the setting up of facilities and equipment. The Agreement provided for a hire-period commencing on 19 November 2018, with the “bump-in” period being 10 days.

24    On 28 February 2019, the Liquor Amendment (Music Festivals) Regulation 2019 (NSW) (Music Festivals Regulation) was published on the NSW legislation website and took effect on that day: reg 2. The explanatory note to the Music Festivals Regulation stated:

The object of this Regulation is to amend the Liquor Regulation 2018 to provide for a new type of liquor licence for music festivals and provide for the Independent Liquor and Gaming Authority to direct particular applicants to apply for a music festival licence. A music festival licence will authorise the licensee to sell or supply liquor on licensed premises, subject to conditions. The Regulation will provide also for the training requirements of licensees, managers, approved agents and supervisors for licensed premises under a music festival licence.

Under the Music Festivals Regulation, the “music festival licensee” was the person holding a music festival and an applicant for a music festival licence must have entered into an agreement with the owner of the premises the subject of the application to hold a music festival on the premises: regs 61A, 61E.

25    On 16 July 2019, Mr Commens lodged with MidCoast Council (Council) an application to modify the existing development consent approving the use of Riverwood Downs for the festival: CB 3/839. By the application, Mr Commens sought approval to conduct the Subsonic festival at Riverwood Downs in December 2019 and annually for the following four years and to increase the approved capacity to 10,000 patrons.

26    On 22 August 2019, there was a meeting concerning the planning for the 2019 festival attended by, among others, Mr Commens, Mr Hall, Ms Carroll and Peta Stimson of the Council: CB 3/842. The evidence discloses that Ms Stimson was the Council’s Development Planner. This meeting was subsequently referred to as the “stakeholder meeting”.

27    On 26 August 2019, Lew Short of Black Ash Consulting, who Mr Commens had engaged to prepare bushfire risk materials, sent an email to Alan Bawden of the NSW Rural Fire Service, stating (CB 3/848):

I appreciate that you have not received this application as yet. The proponent has come back to me with additional information post a discussion he had with Council.

To limit uncertainty associated with increasing the numbers, they are seeking that the DA and festival for 2019 to operate under the same conditions as previously.

28    On 6 September 2019, Mr Commens sent an email to Ms Stimson of the Council stating (CB 3/854):

As discussed at the Stakeholder meeting, I am happy for this years DA application to be approved for the dates (5–9 Dec) under the same conditions as last year (5000 patrons) to make things easier in terms of planning and approvals.

29    Mr Commens applied for a music festival licence on 4 September 2019 (CB 3/859) but on 26 September 2019, the Music Festivals Regulation was disallowed in the Legislative Council.

30    On 2 October 2019, Mr Commens received an email from Ms Stimson attaching a letter which was said to concern “the information Council is waiting on to be able to complete our assessment of the proposal”: CB 3/864. The attached letter stated that “noise and traffic concerns were key issues [raised] in submissions received from the community during the public notification of the proposal”: CB 3/860. The Council said that, as had been requested by email dated 23 August 2019, it required a “Traffic Impact Assessment”, prepared by a suitably qualified and experienced traffic engineer and containing identified information, additional information in relation to sewage management, said to have been previously requested by email dated 23 September 2019, and additional information which clarified any intended noise mitigation measures and demonstrated compliance with the New South Wales Environment Protection Authority’s Noise Policy for Industry (2017) and Noise Guide for Local Government (2013).

31    The letter further stated (emphasis in original) (CB 3/862):

Please note that revised plans and supporting information requested above must be provided within 14 days of the date of this letter. Please submit the requested information by no later than 5pm on Wednesday 16 October 2019. If no response to this letter is forthcoming, it will be taken that you have refused to provide the information and the application may be dealt with accordingly.

As discussed, the application will be determined by the elected Council. To allow time for information requested to be submitted and reviewed by internal sections, it is anticipated that the application will be tabled at the Council meeting on Wednesday 13 November 2019. Please note there is a three (3) week lead in time for reports to Council to allow for internal review and collation of reports for the business paper.

32    On 2 October 2019, Mr Commens forwarded a copy of the Council’s letter to Ms Carroll: CB 3/863.

33    On 3 October 2019 at 11.15 am, Mr Hall responded to Mr Commens’ email to Ms Carroll, stating among other things (CB 3/863):

Council are putting you in an impossible position, because they are now proposing to delay the decision on the DA until the 13th November which is two weeks before the Festival after publicly indicating to OLGA and all stakeholders at the RWD meeting that if the numbers were reduced to 5000 for this year they could probably give OLGA a letter indicating the DA would be approved with the final conditions to be finalised as the DA progressed. How do they expect you to book overseas bands, acts, stages, lighting, security, police, ambulance, order food and alcohol, bump-in etc etc - two weeks before the gates open?? They are also aware that ticket sales would [virtually] be sold out by then and they would be creating a diplomatic and financial nightmare. You probably need to book an appointment to go and see the Mayor or General Manager (ask Karen about strategy?) very soon or Peta and Co could hang you out to dry. She looks like she is trying to get you to cancel the event by stealth by delaying the consideration of the approval to 13/11 when she knows you can’t possibly organise it in 2 weeks … If she had said she intended to jump you through all the hoops she is now proposing – which really pertain to increasing the numbers – over what history has demonstrated the site can comfortably handle, you would have had time to reschedule the Festival dates (which could be a worse case option) to allow for all the organisational lead time any event of this complexity requires.

Remembering she publicly indicated to you 5000 wouldn’t be a problem, if you don’t push the point now – and you need to do it in Taree face to face with the top brass – not on the phone or by email, you are heading for disaster, because she is going to stuff you around (or already has) until you run out of time.

34    On 3 October 2019 at 6.05 pm, Mr Commens sent an email to Ms Karen Hutchinson, copied to Mr Hall, referring to a telephone conversation with her immediately beforehand and confirming for Ms Peta Stimson that he would “go for 5000 this year” and seek Ms Stimson’s support for an incremental increase year on year based on a debrief following each event (Supp CB 1/380). Ms Hutchinson was a Councillor of the Mid Coast Council.

35    On 3 October 2019 at about 11.20 pm, Mr Hall sent an email to Karen Hutchinson (copied to Mr Commens) stating (CB 3/865):

I think it is worth me having a meeting with the GM and give him the background and overall overview of the forces at play this year and the ramifications for Scott if he doesn't get the DA asap. He has had to already book his overseas acts and has paid their air fares. This was done in good faith after he was told at the 22nd Aug stakeholders meeting that there would not be any major problems if the number was reduced to 5K. If he had been told at that time that council would take 4 months to give him a decision which would be only two weeks before the event, he would have taken a completely different course and not incurred the massive expenses that have been paid since that meeting.

36    On 4 October 2019, Ms Hutchinson sent an email to various persons at the Council, stating (CB 3/866):

My understanding is this DA was lodged in July 2019 and will not see a Council meeting until the 23rd November 2019 … I have asked the Mayor to meet with the owners of Riverwood Downs and the promoter Scott Commens ….

37    On 4 October 2019, Mr Hall received an email from Lineve Clarke, Executive Assistant of the Council, confirming that a meeting had been scheduled for 11 October 2019 with the Mayor, David West, and others: CB 3/870.

38    On 9 October 2019, Mr Hall sent an email to Ms Clarke confirming that he, Ms Hinshelwood and Mr Commens would attend the meeting on 11 October 2019: CB 3/867–8.

39    Later on 9 October 2019, Mr Hall sent an email to Ms Clarke (copied to Mr Commens) attaching what he said was “a briefing note I have prepared for the Mayor”: CB 3/869. Among other things, the attached briefing note stated (emphasis added) (CB 3/871):

As part of the Festival Licence process a full stakeholders meeting was held at Riverwood Downs on the 22nd August … The issues with increasing the numbers to 10,000 in the short time frame remaining were raised and discussed at some length, after which Scott addressed the meeting and agreed with the common sentiment that the best solution to progress the matter, in the short time frame available, was to reduce the participant numbers back to the 5000 that had been the successful criteria for the last 10 years …

…

The meeting finished very amicably with all parties happy with the reduction to 5000 for this year, which basically addressed all the concerns that had arisen during the consideration of the higher number. Scott rightfully left the meeting with the understanding that at 5000 the event would be supported by all the stakeholders and he continued his planning accordingly.

The events that have followed have not reflected the consensus feeling at that meeting … It has also transpired that the planning consideration process has been extended to the point where the DA decision is currently listed for [Council’s] Meeting on the 13th November, leaving 3 weeks after the decision to organise or cancel a festival for 5000 people. This put Scott (or anyone else) in a completely untenable position because the very nature of this type of event means that tickets have to be sold, international acts have to be booked well in advance, deposits and international airfares paid, local acts, stages and major infrastructure have to be booked and paid for in advance, none of which would be possible in the 3 week time frame currently being proposed by Council.

40    Mr Hall’s briefing note concluded (emphasis added) (CB 3/873):

What are we hoping to achieve as an outcome from Friday’s meeting with Council?

We ask that based upon the status quo of 5000 participants, Council expedite the matter by approving a 5 year DA for Subsonic for 5000 participants with a reviewable condition to apply a progressive increase in numbers based upon an annual review of each event.

To achieve a commercially viable timeframe and as the current DA requested is for the same approval Council has already given for the past 10 years, we ask the matter not be held over until the mid-November Council Meeting and be approved by [Council’s] Planning Committee or by Mayoral prerogative.

In the anticipation of a more empathetic and less prescriptive approach by Council, we would also ask that if any additional conditions to the previous DA are under consideration, these be discussed and agreed with Scott asap and before they are applied to the final DA, to ensure the ramifications are understood by all parties and that conditions are not imposed on the DA that would be virtually impossible for any promoter to comply with.

41    On 10 October 2019, Mr Hall received an email from Ms Clarke (copied to others including Mr Commens and Ms Stimson) advising that the Mayor had considered his note and stating (CB 3/874):

The Mayor has asked me to let you know that he is not in a position to expedite the Development Assessment (DA) process, nor can he or will he approve the application at your meeting with him. As you are aware, the matter will be reported to Council and therefore his decision in respect of the application will be made after reading the Council officer’s report.

The Mayor has no delegated authority to approve a DA and cannot interfere or influence a DA process. The role of the Mayor at tomorrow’s meeting is to help facilitate your discussions with staff on this important matter.

42    On 10 October 2019, Mr Commens responded to Ms Clarke’s email stating (CB 3/877):

Thanks for your feedback. I was always of the understanding that this would be considered and discussed at a council meeting. I was advised that there was a meeting in October and last Friday was the deadline for the planning team to prepare a report in order to expedite and have this go to Council in October. I am confident I have provided everything Peta requires but am yet to receive confirmation

…

It would make a world of difference to me if we could have this considered in October.

43    On 13 October 2019, Mr Hall sent an email to Mr Commens, copied to his daughters, attaching a memorandum setting out a proposed justification for the Council allowing increased noise levels during the music festival (Supp CB 1/386–7).

44    On 28 October 2019, an industry friend of Mr Commens, Azaria Byrne, spoke with Michael Hope, who was associated with a venue called “Hope Estate”, located in Pokolbin in the Hunter Valley of New South Wales. The following day, 29 October 2019, Mr Hope sent an email to Ms Byrne stating, “Good to chat yesterday and I’m keen to host Subsonic at Hope Estate in December”: CB 3/879. Ms Byrne responded to that email the same day and copied in Mr Commens: CB 3/879.

45    On 2 November 2019, Mr Commens met with Mr Hope at Hope Estate. On 3 November 2019, Mr Commens sent an email to Mr Hope stating, “We are working on everything to be able to make a decision asap and will be in touch within approx. 1 week”: CB 3/876–7.

46    On 5 November 2019, Ms Stimson issued a letter from the Council stating that Mr Commens’ application would be considered at the Council’s ordinary meeting on 13 November 2019: CB 3/882. It was said that a copy of the business paper report on the matter would be available to view on the Council’s website and at the Council’s administrative offices from the Friday before the meeting.

47    On or about Friday, 8 November 2019, the Council published its business paper report relating to Mr Commens’ application and recommended that it be approved subject to various stipulated conditions: CB 3/891–925. The recommended conditions contained in the Council report included that the approval would be for the 2019 festival only (CB 3/912), and that the event would be limited to 5,000 patrons (CB 3/913).

48    On Monday, 11 November 2019 at 11.25 am, Ms Carroll sent an email to Mr Commens stating, “Just checking if you have had any confirmed information re the postponement of the meeting of Wednesday’s meetings”: CB 3/1061. Ms Carroll extracted from a statement she said had been posted on Facebook, as follows:

Dear Councillors

As you would be aware our region is facing unprecedented fire risk over the coming days.

As a result we are going into an emergency management function from lunchtime today. Our offices will close and we will be focusing on supporting emergency services.

…

As a result the Council meeting and all other normal Council business will be cancelled for at least this week.

49    Mr Commens responded by email, indicating that he had received confirmation of that news: CB 3/1062.

50    At 1.17 pm on 11 November 2019, an email was sent from Riverwood Downs’ reservations email address, in response to an enquiry seeking an “update on conditions in your area”. The responsive email stated, “Conditions in our area are ok. We have no fires in the area at this point”: CB 3/1063.

51    On 12 November 2019, Ms Carroll sent an email to Messrs Commens and Hall indicating that she had been reading the material published by the Council in relation to Mr Commens’ application. Ms Carroll stated (CB 3/1065):

“Have a read as it’s advising us what needs to be done to comply …”.

52    On 13 November 2019 at 1.24 am, Mr Commens sent an email to Mr Hope, setting out a number of suggestions and questions relating to holding the 2019 music festival at Hope Estate. The email concluded by anticipating further questions “so I can satisfy everything I need to make a decision” (CB 3/1066A–1066B). Mr Hope responded at 7.51 pm that day with detailed answers to Mr Commens’ questions (CB 3/1066A–1066B).

53    A document dated 13 November 2019 was entitled “Updates for the Riverwood Team”, stating that it was written by “Rachael, Toni & Chris” and headed “SUBSONIC 2019 POSTPONED”: CB 3/1067. It reported on the cancellation of the Council’s scheduled meeting of that day and stated:

We have all been waiting for the answer to whether Subsonic DA has been approved for this year, it has now been taken out of Subsonic’s hands, due to the Catastrophic Fires in the mid north coast. They will have to postpone the event to another date in 2020.

What happened you ask? – The Midcoast Council went into an Emergency management function. Council offices closed and are supporting emergencies services. Due to this happening the meeting that was scheduled for the 13th of November at council was cancelled, there has been no new date set for the meeting.

The DA application had a recommendation to be approved subject to conditions. (that were to be discussed at the meeting which is cancelled) This has put Subsonic into a position where they have run out of time to finalise the council conditions the council propose.

We are informing our Staff so you all have a true understanding to the outcome as it applies at this moment. A formal press release will be issued in a few days.

We ask and trust that you don’t mention the postponement to anyone out of the Riverwood Downs team until the formal press release has gone out.

54    This document appears to have been attached to an email by Ms Carroll to Ms Hinshelwood and Mr Hall of 13 November 2019 at 6.18 pm, seeking comments and saying that she would like to get it out “pronto” (Supp CB 1/459). Mr Hall responded saying that he had picked up some of Ms Hinshelwood’s additions and added a few of his own, saying that Ms Carroll should send it out if she was happy with that version (Supp CB 1/459). The headings remained the same and the text of the re-draft was as follows (Supp CB 1/460) (noting that the document is dated 21 February 2024, which appears to be the date on which it was printed for the purposes of these proceedings):

Hi everyone,

We have all been waiting for the answer to whether Subsonic DA has been approved for this year, which was supposed to happen yesterday.

The Catastrophic Fires in the mid north coast has taken the course of events out of Subsonic’s hands and Scott will have to postpone the event to another date in 2020.

What happened you ask? – The Mid Coast Council went into an Emergency management function. Council offices closed and are only supporting emergencies services. Due to this happening the meeting that was scheduled for 13th of November at Council was cancelled, and the next Meeting is not until 29th November, ONE DAY before Sub bump-in was due to start.

The DA application was recommended to be approved by Council subject to Conditions (that were to be discussed at the meeting which has now been cancelled), but without the actual approval Scott could not start building the Festival and he certainly couldn’t do it in one day.

This has put Subsonic into a position where they have run out of time to finalise and/or implement the conditions Council propose (One Day!).

We are informing you all so you all have a true understanding of what is happening because there will be plenty of rot bandied about on Social Media. A formal press release will be issued in a few days.

We ask and trust that you don’t mention the postponement to anyone out of the Riverwood Downs team until the formal press release has gone out by Scott and us.

If you would like to ask questions or discuss the news then please just talk to any one of us.

Kind regards,

Rachael, Toni & Chris

55    On 14 November 2019, Mr Hall sent an email to Mr Commens discussing possible means of “simplifying” the traffic plan for the festival and further stating (CB 3/1068):

Make sure you ask Bruce to remove the DA from the Meeting Agenda, because there needs to be a lot more discussion about “Conditions” before it goes up for approval. It also needs to have “enough information” to be a 5 year DA and not a 1 year. You need to tell Bruce the DA on the meeting agenda (1 year) is not what you applied for and you/Council need a lot more discussion before it is ready for approval by Council.

Bruce Moore was the Council’s Manager of Development Assessment: CB 3/860.

56    On 16 November 2019, an email was sent from Riverwood Downs’ reservations email address, in response to an enquiry stating, “Just wondering if you’ve been affected by the bushfires? Thinking about camping the weekend of the 6th December”: CB 3/1069. The responsive email stated, “At this stage we … have not been impacted by the fires. We have Riverside Camping sites available for the dates you are enquiring about”: CB 3/1069.

57    On 17 November 2019, a Matt Grant sent an email to Mr Hope (copied to Mr Commens): CB 3/1070. Mr Grant described himself as providing Mr Commens “with a bit of general management assistance”. Among other things, Mr Grant stated, “To enable us to move the event we need to move onto account, or source funding, for $200K of” the “current costs we need to pay pre-Festival”.

58    In the morning of 19 November 2019, Mr Commens received an email from Ms Stimson, referring to a letter from the Council advising that his application would be considered by the Council at its ordinary meeting on 27 November 2019, commencing at 2.00 pm: CB 3/1084–5.

59    In the evening of 19 November 2019, Riverwood Downs’ reservations email address received an email from a person who had made a booking, which stated (CB 3/1089–90):

In light of all the bushfires over the last 2 weeks, what are your recommendations for our upcoming camping trip with you this coming weekend?

60    At 10.43 am the following day, an email was sent from the Riverwood Downs’ reservations email address in response to that enquiry of the previous evening. The email stated, “We are currently not under any threat from the bushfires as there are none in the local area”: CB 3/1089.

61    On 20 November 2019 at 12.52 am, Mr Grant sent an email to Mr Hope suggesting that Mr Commens needed Hope Estate to provide a “cashflow bridge” to move the festival to that venue, failing which “the event has to stay at Riverwood Downs”: CB 3/1086–8.

62    On 20 November 2019 at 8.08 am, Mr Commens received an email from Mr Hope stating that he had reached the decision that “morning that it’s just too difficult to move the festival to Hope Estate this year”: CB 3/1086. He stated:

Basically too many hurdles and too little time for this year.

Sorry that I’m unable to assist this year but thought it best to let you have a quick decision so you can continue with your planning at Riverwood Downs.

63    On 20 November 2019 at 8.28 am, Mr Commens sent an email to Mr Hope thanking him for the quick reply and stating, “The hurdles did seem a little much when we spoke yesterday”: CB 3/1086.

64    Mr Commens says that “bump-in” for the 2019 festival was scheduled to commence from 21 November 2019: Concise Statement, [15] (CB 1/8).

65    On 21 November 2019 at 9.32 pm, Mr Hall sent an email to Mr Commens indicating that they and Ms Carroll could have a conference call that evening and attaching a document containing what Mr Hall described as “some thoughts that may be helpful when talking with investors”: CB 3/1101. The attached document stated (emphasis added) (CB 3/1102):

Scott, things that are out of all of our hands have changed dramatically for the worse since we all agreed to move the event to another venue.

We agreed that to process a DA for only one year with impossible conditions on it was designed to make the festival fail so MCC had grounds to deny any future approvals and this is why we all agreed that your only chance to have an event this year was to find an alternative venue to RWD and despite the large revenue loss to us we supported your decision to move the event to Hope Estate [or] similar.

The river has stopped running and is as low as we have ever seen it in 40 years with no rain even forecast before Feb 2020. It would be socially irresponsible to bring 6000 people onto the property under the current river, drought and fire danger conditions and if we did so we would be publicly vilified as irresponsible and this would have a huge detrimental effect on our business and the excellent environmental reputation we have worked so hard to build up over 40 years with our neighbours and the Council.

It is unfortunate that you are now having problems with an alternative venue particularly as you were strung along by Hope. If you can’t secure a venue, we will do all we can do help you salvage the situation but that cannot extend to having it here this year for the reasons above. So perhaps the best scenario could be:

Postpone the festival to a date next year “due to the current bushfires and bushfire danger in northern NSW”, which people all around the world are aware of. This would be seen as you being socially responsible and hopefully the type of clientele you attract would support you in that decision.

66    The document sent by Mr Hall also listed what he described as a “plethora of one-off problems that lined up against you this year”, as follows (italics in original) (CB 3/1102):

NSW Government Festival Licence Legislation which absorbed thousands of dollars of your funds and a huge amount of your time and then at the stroke of a pen was revoked,

massive community resistance to your 10K application,

time delays due to the unreasonable Management/Waste/Water /Health/Bushfire plans etc. which absorbed months of your time

and a planner who set out to be over analytical of your application.

67    The document sent by Mr Hall concluded (CB 3/1103):

You know we absolutely feel for you in the predicament you are in and we have demonstrated our commitment to you by supporting your move to another venue even though that move would cost us a lot of revenue and there was no guarantee that if it worked at Hope, you would not continue there as they wanted.

In turn we ask you (and your investors) to understand that under the present drought, dried up river and fire conditions it would be commercial and social suicide for us to facilitate 6000 people to come onto the property in the next couple of weeks.

Hopefully you will be able to do a deal with your investors on a long term relationship and we will certainly support you in those negotiations.

68    On 25 November 2019 at 9.50 am, Lew Short sent an email to Alan Bawden of the NSW Rural Fire Service, stating (CB 3/1106):

I just tried to call you about this one.

I have just heard from the client for the Subsonic Music Festival at Riverwood Downs that the application is not able to get to the Council meeting (they are having fire challenges) and he has had to move the event to another location.

The new location is at Hope Estate in the Hunter Valley (2213 Broke Rd, Pokolbin NSW 2320) ….

69    In the evening of Monday 25 November 2019, Mr Hall received an email from Philippe Porigneaux of Hunter New England Population Health, with whom Mr Hall had been corresponding regarding Riverwood Downs’ private drinking water supply. Mr Porigneaux stated (emphasis added) (CB 3/1124):

Thank you for sending through the data.

In our discussions last week, you advised that the Subsonic Music Festival is not going to proceed this year. Further, that the event organiser was going to officially make this public yesterday (Monday 25 November 2019).

I note that the Subsonic Facebook page makes no mention of the event being called off at Riverwood Downs for 2019. I also note that tickets can still be purchased on the Subsonic website for the Riverwood Downs event for this year.

Can you please confirm the current status of this event for 2019?

70    On 26 November 2019, Mr Hall replied to that email, copying Mr Commens and stating (CB 3/1124):

Hi Philippe, we had a discussion with Scott yesterday and he is in negotiations with two other venues to move the event there. The MCC meeting is tomorrow and although we have cancelled the event at Riverwood Downs for this year, he is still hoping to get approval for the DA for reduced numbers for next year as so much work and expense has already gone into the application.

He is also hoping to finalise his negotiations for an alternate venue before he makes his announcement to the market of the change of venue or has to cancel it altogether.

As part of his presentation to MCC tomorrow, he will be advising Council at the meeting that the event is cancelled at RWD for this year, so it will be public knowledge from tomorrow. His PR people advised him to defer making it public until tomorrow to buy himself as much time as possible to obtain an alternate venue.

71    On 26 November 2019 at 10.53 am, Mr Hall sent an email to Ms Hinshelwood and Ms Carroll attaching some notes for the Council meeting to be held the following day, and asked for their thoughts (Supp CB 1/495). The notes referred to Mr Commens having agreed at the meeting on 22 August 2019 not to seek any increase in patron numbers for 2019 and to have the 5 year DA based on the previously approved numbers of 5,000 patrons, with his request to increase numbers in the future as a reviewable condition based on a debrief of the previous festival (Supp CB 1/496).

72    On 26 November 2019 at 11.44 am, Mr Commens received an email from Stephen Leathley, planning consultant, who wrote (CB 3/1130):

Have you got something in writing from the RFS saying they wanted the event moved from Riverwood Downs please. I am telling Cessnock Council the story that this is last minute because of the fire danger, so something in writing from RFS would be extremely handy.

73    At 11.50 am on 26 November 2019, Mr Commens replied to that email, stating (CB 3/1130):

[It’s] actually the site [that] wants it moved and they seem to think I can just talk my way through it. Very inconvenient considering the timing. I have landholder consent and recommendation for approval from the planners going to council tomorrow. It will likely get approved, but Riverwood Downs have done a backflip on me.

74    In the afternoon of 26 November 2019, an email was sent from Riverwood Downs’ reservations email address, in response to an enquiry regarding “the recent bushfires events and to confirm if my booking is still okay”. The responsive email stated that the “bushfires have not been a threat to our property. Our venue has remained open and I confirm as of right now all bookings for the future are confirmed”: CB 3/1133–4.

75    On 27 November 2019 at 9.15 am, Mr Hall sent an email to Ms Hinshelwood and Ms Carroll stating, “In case the question of who cancelled the festival arises, I attach my thoughts”: CB 3/1137. The attachment begins by saying that, after the 2018 festival, Mr Hall had told Mr Commens that he needed to get his new DA into Council in January 2019, so that he could start ticket sales. Among other things, the attached document stated (CB 3/1138–9):

When the Council Papers for the meeting [of 13 November 2019] were published we discovered that what the planners were proposing was not to consider a 5 year DA as applied for, but to approve only 1 year (2019) with conditions that were virtually impossible to comply with, particularly financially, with the assessment of future years to be considered after a full assessment of the 2019 event against all the [KPIs] set down in the proposed approval.

Catastrophic bush fires then raged across the whole of Northern NSW and in the MCC area in particular which caused MCC to close down and deal with only the bush fire emergencies. The Council Meeting of the 13th Nov was cancelled with all business to be referred to the next Meeting on the 27th Nov. which is 2 working days before the start of the proposed Bump-in and 5 working days before the event. There was no guarantee that the DA would be approved and if it was, it was only for this year under impossible operating conditions.

We had a full discussion with Scott and we all agreed that we had run out of time, that the risks of waiting for the 27th Nov meeting outcome were too risky and the proposal to Council did not include 2020 and beyond. The proposal before Council was in fact constructed to ensure Scott failed to meet all the conditions and thereby gave Council a reason to not continue approvals into the future.

Scott advised that he had an alternate venue at Hope Estate and that he was in discussions with Michael Hope to move the event there. We agreed that although we would lose approx. $400k in revenue, this was in Scott’s best interests and his only hope of survival and agreed that we would take the hit and back him in making the move and we all agreed to cancel the festival for this year. He also had the PR benefit of his DA approval being delayed beyond any viable cut-off point by the Bush Fires which his patrons would be aware of and most would probably support the change of venue.

After the decision was made by all parties to move to Hope Estate another factor came into play at RWD and that was the River stopped flowing … Water restrictions on towns on the River were lifted to Level 4 (extreme) as the river dried up, making it commercially, socially and environmentally impossible to justify a case for bringing 6,000 people to RWD under these circumstances.

In the week after the postponed council meeting of the 13th Nov., when negotiations with Hope Estate began to [falter] Scott asked us where we stood with regard to the RWD site and we confirmed that we had all taken the joint decision for him to move to Hope Estate for the reasons set out above, none of which had changed, and now the river had completely stopped running as well, which had only sealed the untenability of holding the event at RWD this year.

We suggested that Scott’s best course of action would be to notify Council and the objectors that due to the bush fires and increasing drought conditions, he was postponing the event at RWD until next year. Then withdraw his application from the 27th Nov. meeting because it was entirely different from what he had applied for and is designed to make him fail, and then revisit a revised 5K application in January.

For reasons best known to Scott, he decided against this advice and proceeded with allowing the Planning Department’s unreasonable proposal to go to Council on the 27th knowing that it did not cover 2020 and beyond and could be an impediment to future approvals.

76    After 2.00 pm on 27 November 2019, the ordinary meeting of the Council approved Mr Commens’ application subject to the conditions recommended by the Council officers: CB 3/1144–50.

77    On 27 November 2019 at 8.02 pm, Ms Carroll sent an email to colleagues at Riverwood Downs saying that “the word is obviously out” as they were getting a lot of phone calls at work, and the receptionists had been told to say the following (Supp CB 1/500):

Although subsonic DA has been approved, As a result of the present Bushfires, Drought and River conditions, we have jointly agreed with Subsonic to defer the Riverwood Downs event until next year.

Subsonic still planning to hold this year’s event at another venue which will be announced by Subsonics social media in the next day or so.

78    In the morning of 28 November 2019, Ms Carroll and Mr Commens exchanged messages: CB 3/1151–3. Ms Carroll stated that Riverwood Downs was getting a lot of phone calls and the receptionists had been told to say to callers (CB 3/1151):

As a result of the present Bushfire drought and river conditions, we have jointly agreed with Subsonic to defer the Riverwood Downs event until next year.

79    Mr Commens responded that he was not happy with that form of words and that he needed to prepare a press release: CB 3/1151. He stated (CB 3/1153):

Just working through this. Please do NOT tell anybody this was a joint decision. After yesterday’s positive outcome, is there any way you’ll reconsider your decision to not have us [to] do the festival. We’ll truck in water and do everything we can to manage the community?

80    At 10.56 am on 28 November 2019, Ms Carroll received an email from Steve Carroll, Senior Sergeant — Region Licensing Coordinator at Newcastle Police Station, stating that he was “hoping you can send me a return email regarding Subsonic not being hosted at Riverwood [Downs]”. He said that something in writing was needed before police resources could be reallocated. Senior Sergeant Carroll also stated, “Any information you provide will not be disseminated outside of the NSW Police Force without your authorisation”: CB 3/1188.

81    At 12.25 pm on 28 November 2019, Ms Carroll sent an email to Mr Commens, asking him to have a look at an attached document and then to call: CB 3/1154. The document attached by Ms Carroll stated (CB 3/1170):

Scott, we asked you to get your DA in in January 2019 so the event was secure before too many tickets were sold.

This didn’t happen and your late submission of the DA in July together with the time delay in the development of all the consultant’s reports, control plans and statistics reduced available processing time. The stakeholders meeting in August followed by the Council advertising period of the DA and the flood of objections further delayed the approval of the DA which ended up being scheduled for the Council Meeting on the 13th November.

Another major issue was the conditions and KPIs MCC proposed to be applied to the application which you advised us were not financially viable and if you complied with them all, you would have no budget left for entertainment. The DA approval was modified by MCC to only be for one year and the conditions were so onerous it was obvious they were designed to entrap you and justify declining future festivals at RWD.

The catastrophic bush fires on the North Coast in November caused MCC to [close] down and go into emergency management mode which cancelled the 13th November meeting and deferred consideration of the application until 27th November. As this did not leave enough time to organise a festival at RWD and supply all the additional or outstanding reports required to be lodged with MCC before the Festival, you had a discussion with us and advised that you were planning to move the event to Hope Estate and you were already in discussions with Michael Hope to facilitate the change of venue. Although this meant we would lose all the revenue we generate from Subsonic and there was no guarantee it would return to RWD in the future – depending upon patron’s response to the new venue – we agreed with you that it was in your best interests and probably your only chance of salvaging the event and willingly supported you by agreeing to the event moving to another venue. You advised that although you were moving the event this year, you would continue to seek the DA approval as well so it was in place for next year.

So the initial decision to move the event to another venue was actually yours with our full support, so to suggest it was not a “joint” decision is not correct.

82    The document sent by Ms Carroll then moved to discuss what had occurred following and as a result of that initial decision (CB 3/1170):

Since that decision was taken, things have [spiralled] rapidly. Apart from the river drying up with no water for the patrons to swim in or enjoy, as a result of the decision we took with you we have not proceeded with the liquor license, the required waste water report has been deferred by Whitehead because it was no longer needed and the fees have not been paid, we have cancelled all of our festival staff, we have cancelled all of our food and liquor suppliers, security, we have released the hold on all the hired refrigeration and cancelled all the ice and bottled water, the main liquor sponsor has been notified of the cancellation, Hunter Health and the police have been notified of the cancellation and are in the process of reallocating their logistics to other work, the businesses in the local towns have cancelled their orders. With only 5 working days until the gates would have been open we have totally run out of time to reverse all of this for this year.

83    The document concluded by stating, “although we are out of time for the next week, now you have the DA we are happy to set an alternate date with you which could be released as a postponement of the event”: CB 3/1170.

84    At 1.43 pm on 28 November 2019, Mr Commens responded to Ms Carroll’s email, stating (CB 3/1167):

Whilst it is true i shared with you that i was looking at a plan B because i was concerned about the [bushfires] and the cancellation of council meeting and conditions requiring changing, I was never in a position to make a decision to move as we needed to work through processes.

All i am asking for now is that you do not advise of cancellations and that we need some time to work on a press release [which] we hope to have out today.

If there is any chance you'll change your stance on this, we’ll be able to do the [festival] and we will have a future together.

Otherwise i stand to lose so much, I’m worried the [business] will be finished :(.

85    Ms Carroll forwarded that email to Mr Hall: CB 3/1167. In response, on 28 November 2019 Mr Hall prepared a draft email to be sent to Mr Commens: CB 3/1166. It commenced:

With regard to having it here next week, you don’t seem to have taken into account all the major elements that have been cancelled and can’t be [revived] in a week.

86    Mr Hall’s draft email then turned to the conditions applying to the development consent and stated (emphasis added) (CB 3/1166–7):

I have been going through the Annexure A conditions with Chris, that Peta said will be on the approval when you get it and it is quite clear that you [won’t] be able to comply with most of them and we will be in a major shit fight with council and the locals afterwards which will end any future chance of having Sub here. It is not us who are now standing in your way, it is no time and impossible conditions that prevent it from going ahead next week. We are prepared to work with you on an alternate date, so you don't have to “cancel” the event, but there is no way Jesus Christ could put the event together and COMPLY with all the conditions in a week. When you go through the Annexure A you will see that there are many conditions and reports that have to be SUBMITTED to Council and APPROVED by them before you can even start set-up.

I attach a copy of Annexure A with a lot of the problems “highlighted” to bring them to your attention - they are absolute crap and require 204 toilets, 63 showers, approval Water Quality Plans covering your filtered water stations, flow [meters] installed to measure waste water generation, defendable 10 mtr bushfire protection around the whole site, water tanker on the road 11 hours a day from set-up right through the end of the festival, [Traffic] lights [and] Illuminated sign boards on all the [roads] and one lane bridges, all river bank trees (and their roots!) fenced off - and it goes on and on and on. Not to mention the low noise levels they have set and the need to monitor at all [affected] houses (including [Margaret’s]). We are both going to lose a lot of money, but Peta has [successfully] stitched you/us up as she always intended to.

So even a deferred date would need a new DA for the lower numbers and the chance to negotiate more reasonable conditions.

I have changed the wording the staff use when they are fielding calls, but the police keep ringing me because both you and we have told them it is deferred and they need it in writing from us today which I have undertaken to give them.

87    At 2.57 pm on 28 November 2019, Ms Carroll sent an email to Mr Commens containing the substance of Mr Hall’s draft email: CB 3/1155. (Some spelling errors in the draft had been corrected.)

88    On 29 November 2019 at 12.58 am, Ms Carroll sent an email to Mr Commens headed “The copy of the Council documents highlighted as mentioned Chris and I were working through” and stating (CB 3/1178):

We told you we had been going through the document for you and have highlighted the hidden ramifications in many of the conditions. I know you have already submitted a lot of the reports before you got the approval, but most of them would need to be redone to meet the specific requirements in the conditions. Have a good look at the attachment and go through it carefully because you will find many traps that you may have missed the first time around.

89    The attached document extracted various conditions which had been imposed by the Council and commented upon them: CB 3/1179–1187. It concluded (emphasis added) (CB 3/1187):

Once you study the details and hidden ramifications of each and every one of the above Conditions we are sure you will come to the conclusion that you have been stitched up by the Council Planners.

Even if we were back at the 13th November with approval on that date, it would not have been possible financially or logistically to prepare all the pre-event Plans and Reports the Conditions require and have [them] approved by Council and obtain and install all the facilities and equipment and construct the infrastructure the Conditions require.

There are hundreds of thousands of extra costs in meeting these unreasonable Conditions and Peta has put you on notice that each and every one will be checked and evaluated in the Performance Evaluation Report after the event and approval of any future event will be conditional upon all of the KPIs being met.

You can be sure that there will be a disproportionate degree of scrutiny by both Council staff and the objectors who will both be out to prove their point that they don’t want the Festival to continue.

There is no doubt this DA is an entrapment and is of no commercial value and there is no way a festival can be organised in one week under these Conditions.

A failed attempt would do untold damage to both your reputation and the reputation and future of our business.

We gave Dave from Sydney University Union a glowing reference for you, so hopefully you will be able to get the job done with them.

If not, we need to lodge a new DA for a festival next year and start again leaving plenty of time to debate and negotiate each and every Condition to be applied to the event. We are happy to negotiate a mutually acceptable alternate date for the festival and will be happy to work with you to try and achieve a more reasonable outcome with Council.

90    At 8.00 am on 29 November 2019, Mr Commens received an email from Mr Porigneaux of Hunter New England Health: Supp CB 2/490. That email asked him to:

… please inform this office of arrangements for this year’s Subsonic Music event, including when it will be made public that the event is not proceeding at Riverwood Downs, Monkerai and the new location for the event. Can you please advise this office by close of business today.

91    At 11.11 am on 29 November 2019, Ms Carroll sent an email to Mr Commens informing him that she had spoken to Senior Sergeant Carroll that morning and had also sent him an email stating (CB 3/1188):

Please be advised that Subsonic Music Festival will not be hosted at Riverwood Downs for 2019.

We are planning that it will be held with us again at Riverwood Downs in 2020.

Scott will appreciate the media comment not going out until the media release goes out to help manage the online confusion.

92    On either 28 November or 29 November 2019, Mr Commens caused there to be published a statement that the 2019 festival had been ‘postponed’ “amid safety concerns arising from ongoing fires in the area and critically low water levels in the Karuah River”: CB 3/1172. It was further stated (CB 3/1172):

Despite our best efforts to work through the concerns of the event stakeholders, unfortunately we have been given no other option but to temporarily postpone the festival … We were only advised of the unavailability of Riverwood Downs at very late notice and were unable to safely change the venue for next weekend.

93    At 10.00 pm on 29 November 2019, Mr Hall sent an email to Mr Commens stating (CB 3/1191):

I have had a look at the announcement on your website and think you have handled a difficult situation very well.

It is very well crafted and hopefully it will work for you and you won’t be faced with too many cancellations.

94    On 3 December 2019, the Council formally issued a Notice of Determination reflecting the approval decision of the Council on 27 November 2019: CB 3/1207–40. Its content reflected the approval conditions which had been recommended to the Council.

95    The 2019 festival did not take place at Riverwood Downs from 5 December to 9 December 2019. Instead, between 6 December and 8 December 2019, Mr Commens ran multiple events across bars and clubs in Sydney. These events were open to festival ticket-holders.

96    On 13 December 2019, an email was sent from Riverwood Downs’ reservations email address, in response to an enquiry regarding whether the campground was “safe from bushfires”. The responsive email stated that the “We currently do not have any fires in our immediate area”: CB 3/1244.

97    On 15 December 2019, an email was sent from Riverwood Downs’ reservations email address entitled “Seasonal Update For The Barrington Coast” and stating (CB 3/1247–9):

Our lovely river has stopped running and we have lost our swimming and canoeing water until it rains, but everything else is fine. Our property is still nice and green …

…

We have not been impacted by the fires on the north coast and there are no fires in our area, so you will be able to have a campfire (subject to weather conditions).

98    On or about 18 December 2019, Mr Commens prepared a document which he provided to Mr David Keane whom Mr Commens had engaged to act on his behalf in preparing and lodging an insurance claim (the Sequence of Events) (Supp CB 1/70–76). Although the document does not bear Mr Commens’ name, Mr Commens accepted that he prepared the document in December 2019: T53.34–35. The document provides a detailed chronology of events concerning the 2019 Subsonic festival, and the salient passages are as follows (with emphasis as in the original):

Never at any point was cancelling the event a consideration for me. This event was potentially the most important event in its history for me to continue growth and to secure investment.

The events that followed are outline [sic] below.

27.10.19

Fires began blazing in the Mid Coast area of NSW around the end of October [reference is then given to an article on the ABC news website of 26 October 2019 entitled “NSW Bushfires Claim Homes as Heat and Wind Fan Flames”]

This got me to thinking it might be sensible to seek out a plan B in the case I may need it closer to the festival date. I had a potential investor planning to fly out from Switzerland, another up from Melbourne and multiple interested parties from NSW. I wanted to be sure the event went ahead no matter what the circumstances!!

[The document then refers to the introduction of Mr Commens through Azaria Byrne to Michael Hope from Hope Estate]

01.11.19

Matt Grant (Subsonic Sustainability & Community Manager) & I attended a community meeting at Monkerai Community Hall which was a meeting planned by Subsonic to discuss any concerns of the local community surrounding the planned event – Subsonic Music Festival.

One main concern was the fact that the Monkerai River was almost dry and neighbours had concerns about water usage and the impact of 6000 people embarking on Riverwood Downs for a weekend on 6-8 Dec.

…

11.11.19

Bruce Moore (Mid Coast Council Development Planning division) calls to advise that Ordinary Meeting which was scheduled for 13th November to vote on approval for our DA was postponed due to fires in Forster. The Council was in shut down.

Although this raised levels of concern, we were still feeling comfortable with the Plan B being negotiated with Michael Hope of Hope Estate

12.11.19

Rachael Carroll from Riverwood Downs emails me to advise she has read the council report and noted that it also lists the negative conditions. Rachael sends me the DA.

12.11.19

I sent text message to Chris from Riverwood downs advising I was concerned about the conditions but would sleep on it. Was feeling very down that day and it seemed like Hope Estate may be worth exploring some more.

…

13.11.19 (approx.)

I shared the idea with Riverwood Downs of moving the event. They seemed unusually very supportive. I did mention that it would not be possible without a camping DA. Around this time, Riverwood Downs started trying to encourage me to move the event citing a number of reasons. The DA conditions, the river being empty, the threat of fire. It seemed in everybody’s interest for me to continue exploring the idea.

14.11.19

Chris Hall (Riverwood Downs) provides feedback for me to pass on to Mid Coast Council to lighten some of the DA conditions. Also suggests I ask planners to withdraw the DA until we can get better conditions. Riverwood Downs seem very intent on us moving to Hope Estate which would buy us some time to further discuss DA conditions and ensure a smoother operation in 2020.

At this stage I had no real reason for concern as the Hope Estate option seemed viable. Michael Hope had advised he was confident he could get the camping addition through with council as an “add on” to his existing DA for concerts. I advised Chris Hall from Riverwood Downs that I was not in position to move until I had an agreement with Hope Estate, but was happy to continue exploring the idea.

…

20.11.19

MidCoast Council advise our DA will be considered at the next Ordinary meeting on 27th Nov, 2019

20.11.19

Michael advises he cannot support the event this year due to limited time and just too many hurdles to jump (email provided)

20.11.19

I immediately advise Rachael Carroll (via text message) from Riverwood Downs that Hope Estate is not looking viable and let them know that we would be proceeding at Riverwood Downs. Advised that considering the DA was recommended for approval and was now going to Council for vote at the Ordinary Meeting on 27th Nov that we intend to accept the conditions as recommended and proceed due to no other known options for venues.

Rachael sends photos of the river which showed it was pretty much bone dry and says we need to talk ASAP.

20.11.19

Have a conference call with Rachael Carroll, Tony Hinshelwood & Chris Hall of Riverwood Downs. They have grave concerns for the safety of patrons due to the river being so low that water cannot be pumped from the river. I offered to truck in water and said we will do what it takes to ensure we run a safe event with enough water. I had not obtained quotes for the water, but was willing to do whatever it took to ensure the event went ahead. Reminded Riverwood Downs that I had investors coming to see the event and that cancelling was not an option.

They seemed to have made their mind up and asked me to try pushing again for Hope Estate which I said I would, but I pleaded with them to reconsider and advise this will be the last year I would do Subsonic at Riverwood Downs if they were not going to support me. It was a [sic] in depth conversation. I pleaded with them and ran through all of the negative impact on the bushfires if they were not to support (i.e possible bankruptcy, loss of investor intereste [sic] etc). I finished up the phone call by asking would they please sleep on it and reconsider.

…

21.11.19

I asked Riverwood Downs if they had considered or discussed amongst themselves the possibility to allow us to hold the event. Reminded them of the income they make from me each year. They advised it was not about money for them and had other concerns. Fires, river, safety etc. I offered again to truck in water and said I would do what it takes to ensure a safe event. They seemed fairly straight that they did [sic: “not” is omitted apparently by error] want the event happening there. The River not flowing was their main concern and they said they had worries with pumping water from the river as it was so low which would have implications in the case of fire. I asked them to keep things quiet while we worked on alternate plans as we were aware if word got out we would have a PR nightmare.

…

23.11.19

I had another phone call with Michael Hope from Hope Estate and offered to do whatever it takes for us to get the event over the line. Advised Michael that Riverwood Downs had concerns over the river levels and the threat of fires and had decided it was not safe to hold the event. Michael is sympathetic to my situation and offers to try and help. He suggests he could use an existing DA he had in place for a camping festival held at Hope Estate in March 2014.

I start immediately on planning alongside Stephen Leathley (Hope Estates Planner).

…

27.11.19

Riverwood Downs advise they are receiving lots of phone calls and word seemed to have been leaked. They asked if they could say that we had “jointly” decided to not hold the festival at Riverwood Downs. I advised them that this was NOT ok.

They advised they would start advising only on incoming phone calls as of 28th.

…

16.12.19

Engaged David Keane to act on my behalf with preparing and lodging intent to claim.

I trust the above will demonstrate that we have had pure intentions the whole way through this process. We really did never consider cancellation to be an option and had varying levels of confidence (confidence regardless) during each stage in the lead up to the festival that the alternatives we were seeking were viable.

Application of the Insuring Clause

Who made the decision not to commence the event and when was that decision made?

99    Mr Hall gave clear and emphatic evidence in his cross-examination to the effect that he had decided to withdraw Riverwood Downs as the venue for the 2019 Subsonic festival on 12 November 2019, and communicated that decision to Mr Commens on 13 November 2019: T134.42–46, 135.38–47, 136.1–11, 137.15, 138.14, 158.06, 169.37, 172.03–04, 174.20–21, and 182.01–27. Mr Hall gave evidence to the same effect in his re-examination: T185.04–05. I accept that evidence, which is consistent with the contemporaneous documents, particularly the update for the staff at Riverwood Downs of 13 November 2019: CB 3/1067 and Supp CB 1/459–60. It is also consistent with Mr Hall sending an email to Mr Commens on 14 November 2019 in which he told Mr Commens to make sure that the Council’s Manager of Development Assessment removed the DA from the meeting agenda for the postponed Council meeting: CB 3/1068.

100    That evidence stands in stark contrast with Mr Hall’s first affidavit, which made no reference to having decided on 12 November 2019 to cancel the festival or to having communicated that decision to Mr Commens the following day. Mr Hall said in that affidavit that on 23 November 2019, a final decision to cancel the event had not been confirmed ([30]). Under the heading “Decision to cancel the event”, Mr Hall said that he spoke to Scott on the telephone on 25 November 2019 and they agreed that the 2019 event could not proceed at Riverwood Downs, and advised the NSW Health Department of the decision by email the following day ([31]–[32]). The affidavit clearly conveyed the impression that Mr Hall had not made a decision to withdraw Riverwood Downs as the venue until 25 November 2019, although Mr Hall said implausibly in his cross-examination that he did not think that was what it said (T170.33–34). In light of the great confidence with which Mr Hall expressed his recollection in cross-examination as to having made that decision on 12 November 2019, this is a matter which causes me to regard Mr Hall as an unreliable witness, whose testimony should be accepted only where it is consistent with the contemporaneous documents.

101    As to Mr Commens, the contemporaneous documents indicate that he did not accept Mr Hall’s communicated decision on 13 November 2019 that Riverwood Downs was withdrawn as the venue. Although Mr Commens pursued negotiations with Mr Hope of Hope Estate, when those negotiations fell through on about 20 November 2019, he pleaded with Mr Hall to reconsider his decision: T147.01–19. Mr Commens did not follow Mr Hall’s instruction to ensure that the DA was withdrawn from the agenda for the postponed Council meeting. Mr Hall accepted that, despite an indication to the contrary in his file note of 27 November 2019 (CB 3/1138), he was unable to say that Mr Commens had actually agreed with him on 13 November 2019 that the festival would not proceed at Riverwood Downs (T168.14–19). Mr Commens gave evidence, which I accept, that he was respectful of decisions made by the owners of Riverwood Downs, but did not accept that he agreed with their decision (T72.23–42; 81.29–30). As Mr Commens said at both the beginning and the end of the Sequence of Events which he prepared, cancellation was not an option for him: Supp CB 1/70–76. The contemporaneous documents indicate that Mr Commens was determined to pursue all available avenues for holding the festival until finally accepting defeat on or about 28 November 2019.

102    Accordingly, there were two decisions to cancel the event. The first decision was made by Mr Hall on 12 November 2013, and communicated to Mr Commens the following day. The second decision was made by Mr Commens himself on about 28 November 2019.

On or about 12 and 28 November, was there as a matter of objective fact an inability to commence with the event which made it necessary to make the decision not to commence with the event?

103    As I have indicated above, the applicant’s case is that there was an objective inability which made it necessary to cancel the event by reason of bushfires and the drought conditions.

104    As to the bushfires, Mr Commens relies on two reports of Mr Lew Short by way of expert evidence. Mr Short referred to the NSW Rural Fire Service issuing a media release on 10 November 2019 forecasting catastrophic fire conditions for the Greater Sydney and Greater Hunter areas on Tuesday 12 November 2019 due to worsening weather conditions. “Catastrophic” is the highest level of bushfire danger. Riverwood Downs is located within the Greater Hunter weather district, which I note also includes the Local Government Area of Cessnock (where Hope Estate is situated, although there is no evidence of anyone regarding Hope Estate as not being available by reason of the threat or risk of bushfires). Mr Short assumed that the decision to cancel the event was made on 21 November 2019, and expressed the opinion in his first report that cancellation of the festival was “reasonable” at that time (CB 1/269–70).

105    In his second report, Mr Short said that total fire ban orders were declared in the North Coast and/or Greater Hunter fire weather districts on 13, 15, 17, 19 and 30 November and 1, 2, 4, 5 and 7 December 2019, and that the declared fire danger rating in the Greater Hunter area was “Severe” on 30 November 2019 and “Very High” on 1–3 December 2019. Mr Short referred to the Bushfire Emergency Management Plan (BEMP) for the Subsonic music festival at Riverwood Downs dated 18 July 2019 (which Mr Short had prepared), which provided a series of triggers depending on various fire and weather scenarios. Mr Short said that the triggers within the BEMP required:

(a)    closure of the event at catastrophic levels;

(a)    closure of the event at severe or extreme fire danger if there was an out-of-control fire within 20 km of the site or an out-of-control fire greater than 20 km from the site; and

(b)    consideration of closure of the site at severe or extreme levels if there were bushfires within the region but not within the area of concern, or no fires.

Mr Short said that those triggers were met on the declared total fire ban days, which I take to be a reference to the “Severe” rating on 30 November 2019, requiring consideration of closure of the event, and perhaps also the “Catastrophic” rating forecast for 12 November 2019 which may still have been operative on 13 November 2019 (although there is no express evidence to that effect).

106    Mr Short’s evidence falls short of establishing that it was objectively necessary to decide to cancel the event by reason of bushfires, either on 12 or 28 November 2019. Mr Short’s conclusion is that the decision to cancel was a reasonable one (as at 21 November 2019), but that is not the criterion referred to in the insuring clause. In my view, there would have been a range of reasonable decisions available on 12 and 28 November 2019, and the selection of a particular decision from within that range would have depended significantly on the degree to which the decision-maker was averse to risk. Counsel for Mr Commens placed particular reliance on the forecast made on 10 November 2019 for a catastrophic fire danger on 12 November 2019, but that date was some three weeks before the festival was due to take place, and the forecast said nothing about the conditions which were expected to prevail three weeks later.

107    Counsel for Mr Commens drew attention to the reasons of Allsop CJ in Outback Music Festival Group Pty Ltd v Everest Syndicate 2786 at Lloyd’s [2022] FCA 13; (2022) 398 ALR 327, which dealt with an insurance policy in substantially similar terms to the present Policy. The organisers of a music festival due to take place at a remote location near Birdsville in Queensland between 7 and 9 July 2020 cancelled the event on 24 March 2020 in light of the COVID-19 pandemic. The insurers accepted that the insuring clause was engaged by reason of the necessary cancellation, but succeeded on an exclusion clause concerning the threat of a communicable disease leading to travel restrictions. Allsop CJ said at [57] that the unfolding pandemic made it almost certain that few, if any, people would be able to travel, and even if people could get to the event, it would be dangerous and fraught operationally to conduct the festival. While the decision to cancel in that case was made more than three months before the event was due to occur, there is little, if any, benefit in comparing an uncontested finding in a case concerning a pandemic with a contested issue in a case alleging that a cancellation was due to bushfires. Importantly, Mr Short did not give any evidence to the effect that the decision to cancel in the present case was a necessary one, or that there was an inability to commence with the festival.

108    Mr Commens also relies on the evidence of Mr Hall in his second affidavit ([25]) which was directed to his claimed decision on 12 November 2019 to withdraw the venue:

While the main fires were approximately 70 km away from Riverwood Downs, we had many days when you could not see 100 metres because of the smoke. Everything was tinder dry. There would have been up to 6,000 people camping in open farmland in dry grass that was 100 to 200 mm long. It was my belief that it would only take a cigarette butt or an accident with someone cooking on a camp stove for a fire to have broken out at the festival. It was my view that under our duty of care you could not bring 6000 people into that environment. I considered the risk of fire to be too great. I formed the view that Riverwood Downs could not host the festival in view of the bushfire conditions. It was my view that our duty of care would not let us do it. This remained my view throughout November 2019 as the fires continued.

In addition, Mr Hall had previously referred to a bushfire occurring by 19 November 2019 near the village of Stroud Road, about 37.5 km from Riverwood Downs (first affidavit at [26] and T133.16–21).

109    I will deal separately below with my reasons for rejecting Mr Hall’s evidence as to his decision to withdraw the venue being based on the threat of bushfires and the drought conditions. In terms of the present question as to whether there was an inability to commence with the event and a necessary decision to cancel it, and having regard to the reservations I have expressed above as to Mr Hall’s reliability as a witness, I regard that evidence as exaggerated. There is a number of contemporaneous documents which demonstrate that those responsible for taking bookings at Riverwood Downs and dealing with members of the public regarded the bushfire conditions as relatively benign. On 11 November 2019, the staff member responsible for bookings emailed a customer who wished to visit Riverwood Downs the following weekend that conditions in our area were “ok” and said that there were no fires in the area at that point (CB 3/1063). On 16 November 2019, the same person told a potential customer who was thinking about camping at Riverwood Downs on the weekend of 6 December 2019 that Riverwood Downs had not at that stage been impacted by the fires (CB 3/1069). On 20 November 2019, another member of the staff responsible for reservations said to a customer, in relation to that person’s proposed camping trip at Riverwood Downs on the coming weekend, that Riverwood Downs was not currently under “any threat from the bushfires as there are none in the local area” (CB 3/1089). On 26 November 2019, that staff member at Riverwood Downs said to a customer that the bushfires “have not been a threat to our property” (CB 3/1133). The seasonal update sent by email on 15 December 2019 from the Riverwood Downs reservations email address said that “We have not been impacted by the fires on the north coast and there are no fires in our area” (CB 3/1248). While I accept that there was a material difference between a festival of some 6,000 people and dealing with patrons who made individual bookings, particularly in that Riverwood Downs was able to offer indoor protection from smoke in relation to smaller numbers of patrons (as Mr Hall said at T175.04–11), the statements by the reservations team at Riverwood Downs are inconsistent with Mr Hall’s claimed recollection of the circumstances at the time. If the smoke had reached unsafe or intolerable levels outdoors for patrons seeking a relaxing break at those times in November and December 2019, then I expect that the reservations staff at Riverwood Downs would have said so in those communications.

110    As to the effect of the drought conditions, while I accept that the dryness of the grass at Riverwood Downs increased the risk of bushfires, there is no evidence that the risk was at the level where the event was unable to commence and where the decision to cancel was a necessary one. Mr Hall confirmed in his cross-examination that the low level of water in the river at Riverwood Downs was not a decisive consideration, and he regarded the river as more a matter of enjoyment of patrons and for the atmosphere of the festival (T147.35–43). Mr Hall volunteered that the state of the river was not part of the decision to cancel the festival (T148.08–10).

111    Accordingly, neither on 12 nor on 28 November, nor indeed at any time before the festival was due to commence on 5 December 2019, was there, as a matter of objective fact, an inability to commence with the event or a necessity to make the decision not to commence with the event by reason of bushfires or the drought. Rather, as Mr Hall accepted in cross-examination, his decision to cancel the event at Riverwood Downs was a prudential decision: T183.46–184.11.

112    It follows that Mr Commens cannot satisfy the insuring clause, and his claim must fail. However, for completeness, I will deal with the other issues which arise in relation to the insuring clause and the exclusions.

Were the bushfires or drought conditions the actual ground adopted in making the decision to cancel?

113    Mr Hall in his two affidavits sought to establish that the bushfires were the basis for his decision to cancel the music festival at Riverwood Downs. In his first affidavit, Mr Hall referred extensively to the bushfires in November 2019, and said that, had it not been for the bushfires, Riverwood Downs would have signed the 2019 Venue Hire Agreement in the usual manner ([34]). Mr Hall said that the decision to cancel was not a result of any increased Council conditions ([38]). Mr Hall’s second affidavit made the point more explicitly. I have quoted above from para 25 of that affidavit, in which Mr Hall said that he formed the view that Riverwood Downs could not host the festival in view of the bushfire conditions. Mr Hall said that it was quite clear in his mind that, had the catastrophic bushfires not been raging across the Mid North Coast of NSW, the 2019 festival would have gone ahead ([62]).

114    Mr Commens also referred in his first affidavit to the bushfires. He attributed his decision to search for an alternative venue at Hope Estate to the bushfires which were occurring in late October 2019 ([20]–[23] and [26]). Mr Commens said that on 11 November 2019 he saw on the news that the State of NSW had declared a State of Emergency in relation to the bushfires, and added that on or about 12 November 2019, he messaged Mr Hall stating that he was concerned “about the conditions”, and he would think about what it meant for the festival ([31]–[32]). That reference to “the conditions” in the context of his first affidavit plainly conveyed that Mr Commens was concerned about the bushfire conditions. However, that evidence was misleading, in that it is obvious from the two Sequence of Events entries for 12 November 2019 (which I have quoted above) that Mr Commens was concerned about the “negative conditions” listed by the Council in its report on Mr Commens’ DA. Mr Commens used the Sequence of Events as the basis of his evidence when preparing his affidavit (T66.46–67.19; 82.37–38), which makes the misleading impression conveyed by the affidavit all the more glaring. However, it is not necessary for me to go so far as to find that the affidavit was intentionally misleading, and I do not express any opinion on that question. It is sufficient for me to say that I regard the contrast between the Sequence of Events for 12 November 2019 (which correctly refers to Mr Commens’ concern about the negative conditions imposed by the Council for the DA) and the erroneous impression in Mr Commens’ first affidavit (that the concern related to the bushfire conditions) as highly damaging to Mr Commens’ credibility as a witness. I do not think that Mr Commens’ testimony should be accepted, except in circumstances where it is consistent with the contemporaneous documents, or consists of an admission against interest.

115    Mr Commens’ first affidavit then continued to develop the theme of the decision to cancel the festival at Riverwood Downs as having been based on the threat of bushfires. In his second affidavit, Mr Commens said that he was frustrated with the conditions attached to the DA approval in 2019, but those conditions were not the reason that he was making inquiries with alternative venues in November 2019 ([15]). Rather, Mr Commens said that he was considering alternative venues because of his concerns, and the concerns expressed by Mr Hall and others at Riverwood Downs, about it being unsafe to hold the 2019 festival at Riverwood Downs because of the bushfire conditions on the Mid North Coast of NSW ([15]). Mr Commens expressed the belief that, but for the bushfire conditions on the Mid North Coast of NSW in November and December 2019, the 2019 festival would have gone ahead ([17]).

116    I reject the evidence of Mr Hall and Mr Commens that the reason for cancelling the 2019 festival at Riverwood Downs was the threat of bushfires. That proposition is inconsistent with the contemporaneous documents. The closest that those documents come to attributing the cancellation to the bushfires is in three documents. The first is the update for Riverwood Downs’ staff members drafted on 13 November 2019 (CB 3/1067 and Supp CB 1/459–60). While it is true that the first paragraph of the initial draft, and the second paragraph of Mr Hall’s re-draft, did refer to “Catastrophic Fires” in the mid north coast having taken the course of events out of Subsonic’s hands, that is then followed by an answer to the question as to what had happened. Taking Mr Hall’s re-draft of the document (Supp CB 1/460), the document explained that the Council went into an emergency management function, and its offices were closed except for supporting emergency services. Accordingly, the meeting that had been scheduled for 13 November 2019 was cancelled, and the next meeting was not until the day before the bump-in was due to start. The document explained that this had put Subsonic in a position where they had run out of time to finalise and implement the conditions which the Council had proposed. That is, the effect of the bushfires was to delay a Council meeting for two weeks beyond the scheduled date of 13 November 2019. As I explain below, Mr Hall would have made the same decision to withdraw Riverwood Downs as the venue even if the Council had granted its approval on 13 November 2019. The bushfires themselves were not the reason for cancelling the festival.

117    The second document is the attachment to Mr Hall’s email to Mr Commens of 21 November 2019 (CB 3/1101). The email refers to the attachment as “some thoughts that may be helpful when talking with investors” (CB 3/1101). The attachment begins by expressly stating that the “impossible conditions” on the DA were the reason why Mr Commens’ only chance to have an event this year was to find an alternative venue to Riverwood Downs. Mr Hall then stated that it would be “socially irresponsible” to bring 6,000 people onto the property under the current river, drought and fire conditions. That is then used as providing a basis for public statements as to postponing the festival (that is, “due to the current bushfires and bushfire danger in northern NSW”). The document lists “the plethora of one-off problems that lined up against you this year”, which did not include the bushfires or drought. Mr Hall could not think of anything which had been left out of that list (T186.44–187.26). The document concludes with a request that Mr Commens and his investors understand that “under the present drought, dried up river and fire conditions it would be commercial and social suicide for us to facilitate 6,000 people to come onto the property in the next couple of weeks”. Those concluding remarks must be read in the context of the document as a whole, which expressly attributes Mr Hall’s decision to withdraw Riverwood Downs as the venue to the “impossible conditions” proposed to be imposed by the Council, and uses the threat of bushfires as a plausible basis for public relations purposes, including in discussions with Mr Commens’ investors.

118    The third document is Ms Carroll’s message to Mr Commens on 28 November 2019 to the effect that the receptionists had been told to say to callers that the event had been deferred as a result of the bushfire, drought and river conditions (CB 3/1151). However, that evidence is merely another reflection of the way in which Mr Hall thought that the threat of bushfires could be usefully deployed for public relations purposes, and does not establish that the bushfires were the actual basis of Mr Hall’s decision.

119    The contemporaneous documents make it clear that the difficulty perceived by Mr Hall, and also by Mr Commens, was that Council was proposing to impose onerous conditions very late in the piece which Mr Hall believed made it impractical to conduct the festival on 5–9 December 2019. On 9 October 2019, Mr Hall’s briefing note for the mayor referred to the DA decision then being listed for Council’s meeting on 13 November 2019, which put Mr Commens “in a completely untenable position” given that it would leave only three weeks after the decision to organise or cancel the festival (CB 3/871). On 10 October 2019, Mr Commens responded to the email telling him that the mayor had no delegated authority to approve a DA, or to interfere in or influence a DA process, by saying that it “would make a world of difference to me if we could have this considered in October” (CB 3/877). On 8 November 2019, the Council published its business paper report relating to Mr Commens’ application and recommended that it be approved subject to the stipulated conditions (CB 3/891–925). I have dealt above with the attachment to Mr Hall’s email to Mr Commens of 21 November 2019. Mr Hall prepared a note on 27 November 2019, shared with his daughters, setting out the basis for the cancellation of the festival (CB 3/1138–9), which referred to the DA conditions set out in the Council papers for the meeting on 13 November 2019 as being “virtually impossible to comply with, particularly financially”, that meeting having been cancelled because of the bushfires, and referred to the discussion with Mr Commens to the effect that they had run out of time, and that the risks of waiting for the meeting on 27 November 2019 were too great. The document also referred to the “PR benefit” of the DA approval being delayed “beyond any viable cut-off point by the Bush Fires”. Similarly, the document sent by Ms Carroll to Mr Commens on 28 November 2019 referred to the onerous DA conditions which the Council proposed to be applied at its meeting on 13 November 2019 which Mr Commens regarded as being “not financially viable”, and that meeting had been cancelled because of the bushfires, thus deferring consideration of the application until 27 November 2019. The document stated that that did not leave enough time to organise the festival and supply all of the additional or outstanding reports required to be lodged with the Council before the festival. On 28 November 2019, Ms Carroll sent to Mr Commens the document prepared by Mr Hall going through the Annexure A conditions, referring to the lack of time and the impossible conditions preventing the festival from going ahead the next week. In a further email on 29 November 2019, Ms Carroll sent a document referring to various DA conditions which had been imposed by the Council, and saying that even if they were back at 13 November 2019 with approval on that date, it would not have been possible financially or logistically to prepare all the pre-event plans and reports which the conditions required and have them approved by Council, as well as obtaining and installing all the facilities and equipment and constructing the infrastructure which the conditions required (CB 3/1187).

120    In his cross-examination, Mr Hall confirmed that when he re-drafted the document updating the Riverwood Downs staff on 13 November 2019 (Supp CB 1/460), the changes which he made were to emphasise the position that Subsonic had run out of time to implement the Council’s proposed conditions: T141.31–34. Similarly, Mr Hall confirmed that the document of 29 November 2019 stating that, even if they were back at 13 November 2019 with approval on that date, it would not have been possible financially or logistically to satisfy the conditions and conduct the event, represented his state of mind at the time: T165.26–44. On 13 November 2019, Mr Commens told Mr Hall that the DA conditions were not financially viable and that they would leave Mr Commens with no budget for entertainment (T71.08–14), and Mr Hall shared the view that the conditions were not financially viable (T136.24–30). Mr Hall accepted that the bushfires provided a “PR benefit” for Mr Commens in being able to explain the cancellation: T157.32–33, 158.25–27.

121    Mr Hall sought to explain the absence of reference to the bushfires as the cause of the decision to cancel the 2019 festival in the contemporaneous documents by referring to the bushfires as “a given”: T151.20–31, 157.37–41, 183.13–14, 186.22–29. I reject that evidence. I do not see any rational basis for Mr Hall to have omitted reference to the bushfires as the basis of the decision to cancel if indeed that was the true basis of the decision. The point is all the more glaring in light of Mr Hall’s evidence that he perceived that Mr Commens may want to litigate against him for having cancelled the festival, and therefore all of the documents that he produced after 21 November 2019 took that into account in ensuring that Mr Hall was making file notes that would provide additional information if that happened: T149.37–41. Mr Hall thought that it was important that the truth be recorded in those documents: T151.33–37. In re-examination, Mr Hall referred to his background and training as an insurance executive for 17 years as informing him that it was prudent to record any and every piece of evidence that may be useful or necessary: T186.03–05.

122    As for the evidence of Mr Short, it is common ground that there is no evidence that Mr Hall had regard to the BEMP in making his decision to cancel: T247.07–09.

123    Accordingly, I conclude that the actual reason for Mr Hall withdrawing Riverwood Downs as the venue for the 2019 festival on 12 November 2019 was the onerous conditions proposed to be imposed by the Council, and his belief as to the lack of time available to satisfy those conditions. The bushfires had caused the postponement of the Council’s decision by two weeks from 13 to 27 November 2019, but that was causally irrelevant to the decision by Mr Hall as he regarded a decision on 13 November 2019 as leaving insufficient time to comply with the conditions in any event (as was stated expressly in the document of 29 November 2019: CB 3/1187). The risk of bushfires may well have been the initial catalyst for Mr Commens seeking an alternative venue at Hope Estate in late October 2019, but the reason for Mr Commens pursuing those negotiations with Mr Hope from 14 to 20 November 2019 was the onerous and untimely nature of the Council conditions and Mr Hall’s decision communicated on 13 November 2019 to cancel the event at Riverwood Downs because of those DA conditions and their timing. During November 2019, the threat of bushfires affecting Riverwood Downs as the venue for the festival was no more than a background concern for Mr Hall and Mr Commens.

124    The risk of bushfires was neither a necessary nor a sufficient cause of Mr Hall’s decision to cancel the festival. The risk of bushfires was not a necessary cause because although bushfires may have contributed to the timing of Mr Hall’s decision to cancel the festival, that decision would probably have been made in any event. And the risk of bushfires was not a sufficient cause because if Mr Commens had secured a DA much earlier and/or with improved conditions, the festival would probably not have been cancelled.

125    As for Mr Commens, the actual reason for his decision was the fact that Mr Hall had decided to cancel the event and Mr Commens could not find a suitable alternative venue. This is confirmed by contemporaneous documents, particularly the correspondence between Mr Commens and Riverwood Downs between 20 November 2019 and 28 November 2019. Mr Commens was desperate to host the festival at Riverwood Downs, but the matter had been taken out of his hands by the decision of Mr Hall. It will be recalled that on 26 November 2019, when Mr Leathley asked Mr Commens for something in writing from the Rural Fire Service stating that the event had to be moved, Mr Commens responded that:

[It’s] actually the site [that] wants it moved … Very inconvenient considering the timing. I have landholder consent and recommendation for approval from the planners going to council tomorrow. It will likely get approved, but Riverwood Downs have done a backflip on me. (emphasis added)

126    Accordingly, neither the bushfires nor the drought conditions were the actual ground adopted by Mr Hall or Mr Commens in making their respective decisions to cancel the festival.

Was the cause of the cancellation a cause which was excluded under the Policy?

127    I have found in the reasoning above that the reason for Mr Hall’s decision to cancel the event at Riverwood Downs was the onerous and late imposition of conditions on the DA by the Council. The cause of Mr Commens’ decision to cancel was the fact that Mr Hall had decided to cancel the event and Mr Commens could not find a suitable alternative venue. The Insurers rely on exclusions 8(b) and (c) in relation to those matters, on the basis that the “necessary arrangements” and “necessary authorisations” included both a DA from the Council and the consent of the landowner. The Policy does not cover any loss directly or indirectly arising out of, contributed to by, or resulting from Mr Commens’ failure to make all “necessary arrangements” and obtain “all necessary authorisations” in a timely manner (and also, in respect of “all necessary arrangements” under exclusion 8(b), in a prudent manner).

128    Dealing first with the issue of the DA conditions proposed by the Council, Mr Hall told Mr Commens shortly after the 2018 Subsonic festival that Mr Commens needed to get his new DA into Council in January 2019 so that he could start to get sales. That is reflected in Mr Hall’s note to his daughters on 27 November 2019 (CB 3/1138) and in the document attached to Ms Carroll’s email to Mr Commens on 28 November 2019 (CB 3/1170). Each of Mr Commens (T36.37–45) and Mr Hall (T115.01–10) agreed in his cross-examination that Mr Hall had said words to that effect to Mr Commens shortly after the 2018 festival. Mr Commens did not follow that advice, and lodged an Application to Modify Development Consent with the Council only on 16 July 2019 (CB 3/839), some six months later.

129    Mr Commens said that in the years when a DA application was required (namely 2009, 2010, 2011, 2012, 2013, 2019 and 2023), it was his standard practice to begin obtaining the supporting evidence and preparing the DA application in the early part of the year and lodge it with the Council around the middle of that year (second affidavit, at [4]–[5]). Mr Commens gave evidence that in 2013 he obtained DA approval on 27 November 2013 for the festival to run from 5 to 9 December 2013 (second affidavit at [8]). Further, on 20 November 2014, Mr Commens was granted DA approval for the Subsonic festival for a 5-year period from 2014 to 2018, and the festival in that year ran from 4 to 8 December 2014 (second affidavit at [9]). Mr Commens said that he was required to notify the Council three months in advance of the events scheduled for 2017 and 2018, that is by the end of August 2017 and 2018 (second affidavit at [9]).

130    While it is not clear from the evidence what reason Mr Hall had for advising Mr Commens to make his 2019 application as early as January 2019, there is no doubt that Mr Hall gave clear advice to that effect, which Mr Commens decided not to follow. Although there does not appear to be any reason to think that the conditions attached to the DA by the Council in 2019 would have been different if Mr Commens had made his application in January 2019 rather than in July 2019, the additional six months would have given ample time for Mr Commens to meet the DA conditions, and to satisfy Mr Hall at all material times that there was a sufficiently strong prospect of Mr Commens satisfying those conditions. While Mr Hall did say on various occasions in November 2019 that he regarded the conditions proposed by the Council as impossible to comply with or not financially viable, he now accepts that with the benefit of hindsight he was proven wrong about Mr Commens’ ability to comply with the 2019 conditions in light of the fact that in 2023 the festival went ahead successfully on almost exactly the same conditions as those imposed in 2019 (second affidavit at [57]). Mr Commens also proved that the conditions attached to the DA approval for the 2023 festival were almost identical to those attached to the DA approval granted for the 2019 festival on 27 November 2019, and he was able to comply with those conditions for the festival which ran successfully at Riverwood Downs from 8 to 10 December 2023 (second affidavit at [10]–[12]). In my view, it is more likely than not that if Mr Commens had followed Mr Hall’s advice and applied to the Council six months earlier than he actually did in July 2019, then he would have been able to satisfy Mr Hall as to the latter’s concerns in relation to Mr Commens’ ability to meet the DA conditions. Accordingly, I regard the decision by Mr Hall to cancel the 2019 festival as arising out of, or contributed to by, or resulting from Mr Commens’ failure to make all necessary arrangements with the Council and obtain all necessary authorisations from the Council in a timely manner within the meaning of exclusions 8(b) and (c), and also in a prudent manner within the meaning of exclusion 8(b). The fact that Mr Commens’ standard practice would have risked engaging those exclusions does not mean they should not apply.

131    As to obtaining the consent of the landowners to hold the festival at Riverwood Downs in 2019, for the reasons given above, I regard it as more likely than not that Mr Commens would have obtained that consent if he had applied to the Council in a timely manner. If Mr Commens had applied in a timely way to the Council then, more likely than not, the owners of Riverwood Downs would have been satisfied as to Mr Commens’ ability to comply with the DA conditions and would not have withdrawn their support for the reason that they did in November 2019.

132    In any event, the issue of landowner consent also raises Mr Commens’ failure to procure a signed Venue Hire Agreement. Mr Commens said in his first affidavit (at [13]) that he usually signed the Venue Hire Agreement with Riverwood Downs in the week or two before the festival when the Subsonic team arrived to set up the venue and “bump in”. While I accept that that was the usual course of events in the years before 2019, I do not accept that such an arrangement was timely or prudent. The owners of Riverwood Downs were at liberty to withdraw their support for the festival in the absence of any contract obliging them to allow the festival to be held on their land, and it strikes me as imprudently risky to wait until the bumping-in period for Mr Commens to obtain a binding promise from the owners. The Insurers are not bound by any such course of dealing between Mr Commens and the owners of Riverwood Downs. If Mr Commens and the owners of Riverwood Downs had signed the Venue Hire Agreement at an earlier point in time, the owners would have been required to establish the existence of a force majeure event within the meaning of cl 14.9 of the draft agreement for 2019 (CB 1/103) or the application of some other provision entitling them to withdraw their support. In my view, it is more likely than not that a signed Venue Hire Agreement in the form of the draft which had been prepared (CB 1/92–106 and Supp CB 1/520–6) would have prevented the owners of Riverwood Downs from withdrawing their support in the manner in which they did in November 2019.

133    For either of the reasons above, exclusions 8(b) and (c) are applicable on the additional basis that all necessary arrangements and authorisations from the owners of Riverwood Downs had not been obtained in a timely manner, or in a prudent manner.

134    The Insurers also rely on exclusion 16 on the basis that any losses arose out of, were contributed to by, or resulted from the withdrawal of support from the owners of Riverwood Downs. Mr Commens submits that exclusion 16 on its proper construction is confined to matters pertaining to financial support (or similar matters) rather than non-financial support. I reject that submission as inconsistent with the ordinary and natural meaning of the language used in exclusion 16 of “financial or other support or withdrawal of such support”, which plainly indicates an intention to extend the clause to the withdrawal of non-financial support by a third party. Accordingly, I regard the withdrawal of support from the owners of Riverwood Downs by reason of their refusal to allow the event to be conducted on that property as falling within exclusion 16.

135    In sum, the causes of the cancellation were excluded under the Policy.

Question 2: Section 54 of the Insurance Contracts Act 1984 (Cth)

136    Mr Commens relies on s 54 of the Insurance Contracts Act 1984 (Cth) (ICA) in the event that any of the exclusion clauses are held to apply to his claim. It is not strictly necessary for me to deal with this question, as I have held that the insuring clause was not engaged by reason of the fact that there was not a “necessary cancellation” in the present case. However, for completeness I will deal also with this question.

137    Section 54 of the ICA provides relevantly as follows:

(1)    Subject to this section, where the effect of a contract of insurance would, but for this section, be that the insurer may refuse to pay a claim, either in whole or in part, by reason of some act of the insured or of some other person, being an act that occurred after the contract was entered into but not being an act in respect of which subsection (2) applies, the insurer may not refuse to pay the claim by reason only of that act, but the insurer’s liability in respect of the claim is reduced by the amount that fairly represents the extent to which the insurer’s interests were prejudiced as a result of that act.

(2)    Subject to the succeeding provisions of this section, where the act could reasonably be regarded as being capable of causing or contributing to a loss in respect of which insurance cover is provided by the contract, the insurer may refuse to pay the claim.

…

(6) A reference in this section to an act includes a reference to –

(a)    an omission; and

(b)     an act or omission that has the effect of altering the state or condition of the subject-matter of the contract or of allowing the state or condition of that subject-matter to alter.

138    I accept that the decision by the owners of Riverwood Downs to refuse to allow the event to be held on their property was an “act” of persons other than the insured within the meaning of s 54. Further, the failure of Mr Commens to obtain the approval of the Council in a prudent and timely manner, and his failure to obtain the consent of the owners of Riverwood Downs in a prudent and timely manner, were “acts” of the insured within the meaning of s 54, noting that a reference to an act includes a reference to an omission by reason of s 54(6)(a). However, in my view each of those acts could reasonably be regarded as being capable of causing or contributing to a loss under the Policy, within the meaning of s 54(2). The lack of timely consent by the Council and by the owners substantially increased the prospect of the event being cancelled, thereby causing loss to Mr Commens as the organiser of the event. Accordingly, I reject Mr Commens’ reliance on s 54 in relation to the exclusion clauses. It is not necessary for me to deal with the further question as to whether s 54 does not operate on the basis that the relevant restrictions or limitations under the exclusion clauses are inherent in the claim, in the sense referred to by the High Court in Maxwell v Highway Hauliers Pty Ltd [2014] HCA 33; (2014) 252 CLR 590 at [23] (Hayne, Crennan, Kiefel, Bell and Gageler JJ).

Question 3: Are the Insurers liable?

139    It follows from the reasons given above that the Insurers do not have any liability to reimburse Mr Commens for such net loss as he may have incurred following the cancellation of the 2019 Subsonic music festival.

Conclusion

140    The separate questions should be answered as follows:

Question 1: No;

Question 2: No; and

Question 3: No.

141    It follows that Mr Commens is not entitled to any of the relief sought in his originating application. The originating application should therefore be dismissed. Counsel for both parties expressed a preference that I deal with the question of costs as part of this judgment. I do not see any reason why costs should not follow the event. The Insurers do not seek any special costs order, and accordingly the appropriate order is that Mr Commens pay the costs of the Insurers.

Associate:

Dated:    29 April 2024