Holden v Vatoff

[2013] FCCA 753

FEDERAL CIRCUIT COURT OF AUSTRALIA

HOLDEN v VATOFF [2013] FCCA 753

Catchwords:
CONSUMER LAW – Misleading and deceptive conduct contrary to s.52 of the Trade Practices Act 1974 (Cth) – respondent falsely represented that he was approved to use name of applicant contrary to s.53(d) of the Trade Practices Act 1974 (Cth) – damage to reputation of applicant – summary judgment against respondent for non-appearance.

Legislation:
Fair Trading Act 1987 (NSW) s.44(f)
Trade Practices Act 1974 (Cth)ss.52, 53(d), 80

Federal Circuit Court Rules 2001 (Cth) r. 21.02(2)(b)

Cases cited:
Enzed Holdings Ltd & Ors v Wynthea Pty Ltd & Ors (1984) 4 FCR 450

Applicant: PAUL HOLDEN

Respondent: SASHA VATOFF T/AS OLD SKOOL ENTERTAINMENT

File Number: SYG 1874 of 2012

Judgment of: Judge Lloyd-Jones

Hearing date: 26 March 2013

Date of Last Submission: 26 April 2013

Delivered at: Sydney

Delivered on: 12 July 2013

REPRESENTATION

Solicitors for the Applicant: I. Chatterjee of Surry Hills Legal Centre

The Respondent: The Respondent did not appear

ORDERS

1. The Respondent pay the Applicant damages in the sum of $6,000.00.

2. The Respondent pay the Applicant the sum of $650.00.

3. The Respondent be permanently restrained from representing any sponsorship, approval or affiliation with the Applicant’s performance services.

4. The Respondent pay the Applicant’s costs of and incidental to the Application. These costs be assessed pursuant to Part 21, Rule 21.02(2)(b) utilising Schedule 1 of the Federal Circuit Court Rules 2001 (Cth).

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYG 1874 of 2012

PAUL HOLDEN

Applicant

And

SASHA VATOFF T/AS OLD SKOOL ENTERTAINMENT

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an Application under the Trade Practices Act 1974 (Cth) (the “TP Act”) by the applicant, Paul Holden, seeking damages and restraining orders against the respondent, Sasha Vatoff T/as Old Skool Entertainment. The applicant performs as a disc jockey (“DJ”) under the ABN 61 667 768 301 and has entered into agreements with the respondent to perform DJ services at events promoted by the respondent.

2. The final orders sought by the applicant are:

   1.  The Respondent to pay the Applicant damages in a sum to be assessed.

   2.  The Respondent is to pay the Applicant the sum of $650.00 within 28 days of the making of this order.

   3.  The Respondent is permanently restrained from representing any sponsorship, approval or affiliation with the Applicant’s performance services.

   4.  The Respondent to pay the Applicant’s costs of and incidental to this application.

Applicant’s Claims

Background

1. Mr Holden, in his Statement of Claim, states that he is a nationally known DJ who has played in or promoted various dance events for approximately 25 years, including a number of “iconic” events during the late 1980s and early 1990s.  During this period he toured nationally and played events interstate as often as twice or thrice per month.  Mr Holden has also released 22 compilation music CDs, as well as a number of original songs which have enjoyed chart success in Europe.  Mr Holden also states that he has played at large music events, such as the annual “Big Day Out” festival and is further known outside the particular musical genre he specialises in.  As a result, the applicant claims to have a substantial reputation and standing among followers of events that refer to the late 1980s and early 1990s dance scene.

2. It is claimed by Mr Holden that the respondent promotes and organises events that refer to the particular musical genre the applicant specialises in, being the dance music scene from the late 1980s and early 1990s, and has engaged the applicant to perform at such events on numerous occasions.  The respondent has organised several events commonly known as “Reunion” in NSW and other parts of Australia which feature late 1980s and early 1990s dance music.  The applicant has been engaged previously on three occasions to perform as a DJ at these events.  On all three occasions the applicant was engaged by the respondent to perform, agreements between the parties as to performance and remuneration were verbal with the applicant being remunerated by the respondent immediately after finishing his performance as a DJ at the event.

First Incident

1. Mr Holden contends that in or around June 2009 the parties entered into a verbal agreement for the applicant to provide DJ services at a “Reunion” event that was to be held on 13 June 2009.  The terms and conditions of the agreement were that the event was promoted and organised by the respondent, the applicant would play a “set” of music for two hours and the applicant was to be remunerated the sum of $650, payable at the end of his performance.  Mr Holden performed at the event for two hours pursuant to the verbal agreement made with the respondent, however, at the completion of the “set” the respondent refused to remunerate the applicant as had been agreed.  Further, the respondent subsequently refused to pay the applicant the monies owed to the applicant.  The applicant issued an invoice to the respondent for the amount owing to the applicant of $650.00 that remains unpaid.

Further Conduct

1. Mr Holden claims that the respondent organised a further “Reunion” event to be held in Perth on 21 November 2009 (the “21 November 2009 Event”) which, at the time, was not known to the applicant.  The respondent advertised the event via his website ( made representations that the applicant would be performing at this event as one of the main acts and made available the applicant’s biography, which detailed his career and successes, as part of the event’s advertising.  The 21 November 2009 Event went ahead as scheduled.

2. Mr Holden alleges that the respondent carried out these acts knowing the representations made by him were false as he was never contacted prior to the 21 November 2009 Event or subsequently by the respondent in relation to it, knowing that the applicant had at no time, or in any way, given the respondent permission to license or use his name in connection with the event or given the respondent permission to use his intellectual property in the applicant’s biography. Accordingly, Mr Holden contends that these acts and representations alleged against the respondent were made in trade and commerce with the respondent knowing the representations were false. The applicant argues that, consequently, the respondent has engaged in conduct that is misleading and deceptive, contrary to s.52 of the TP Act or, in the alternative, the Fair Trading Act 1987 (NSW) (the “FT Act”). Further or in the alternative, the applicant alleges the respondent has falsely represented he has a sponsorship or affiliation with, or approval to use his name, being proscribed conduct under s.53(d) of the TP Act of s.44(f) of the FT Act. The applicant has also suffered loss and damage as a result of the respondent’s conduct, conduct which the respondent is likely to continue to repeat. Accordingly, the applicant seeks injunctive relief under s.80 of the TP Act.

Application for Substituted Service

1. On 5 October 2012 the Mr Holden filed an Application in a Case (the “Sub-Service Application”) seeking the following orders:

   1.  An Order of substituted service in respect of the Applicant’s Application and Statement of Claim, by way of service by email to the email address [email protected] and/or [email protected].

   2.  In the alternate, an Order of substituted service in respect of the Applicant’s Application and Statement of Claim, by way of service on the brother of the Respondent, known as Nik Fish.

   The Sub-Service Application was supported by the Affidavit of Paul Holden affirmed 4 October 2012.

2. These proceedings were in the docket of Smith FM until the end of his commission on 31 January 2013.  The matter first came before his Honour on 5 October 2012 where there was no appearance by the respondent.  Smith FM made the following orders:

   1. Pursuant to Federal Magistrates Court Rules, r.6.14 direct that service of the application may be effected by forwarding copies of the sealed application and of this order to the respondent at his last known email address, and by forwarding copies of those document[s] to the respondent by pre-paid post at his last known postal address for his business.

   2.  Service in accordance with Order 1 must be made by 12 October 2012.

   3.  The application is adjourned for further directions on 26 October 2012 at 9.30am at Court 6D, Level 6, John Maddison Tower, 88 Goulburn Street, Sydney.

3. The proceedings came back before his Honour Smith FM on 26 October 2012.  There was no appearance by the respondent on that day.  His Honour made the following orders:

   1.  Note that the application has been sufficiently served on the respondent pursuant to orders made on 5 October 2012, and that there is no appearance by the respondent.

   2.  Pursuant to rr.13.03C(2) and 13.03B(2)(d) of the Federal Magistrates Court Rules 1999 (Cth) [sic] judgment be entered in favour of the applicant for such relief as the Court may be satisfied that the applicant should be given on an undefended basis.

   ...

   Further orders were made setting down a timetable for the filing of documents and transferring the proceedings to be heard before this Court.

Hearing 26 March 2013

1. The matter came before this Court for final hearing on 26 March 2013.  Mr Chatterjee appeared on behalf of Mr Holden.  The matter was called in the precinct of the court, but there was no appearance by or on behalf of the respondent.

2. I indicated to Mr Chatterjee that I was satisfied that Order 2 of the orders sought in the Application (noted at [2] above) should be made, pursuant to the orders of Smith FM on 26 October 2012. However, I further indicated that, in respect of the damages claim, further evidence would be required in respect of quantification as the evidence relied on by the applicant only established reputation, but failed to quantify the amount claimed.

Applicant’s Evidence

1. The applicant sought to rely on the following evidence:

   a)Affidavit of Paul Raymond Holden affirmed 30 October 2012 (the “First Holden Affidavit”);

   b)Affidavit of Paul Raymond Holden affirmed 12 March 2013 (the “Second Holden Affidavit”); and

   c)Affidavit of Paul Raymond Holden affirmed 24 April 2013 (the “Third Holden Affidavit”), filed pursuant to leave granted at the final hearing.

Applicant’s Submissions

1. Mr Chatterjee indicated to the Court that quantification of the damages claim was a difficult task.  As there was no appearance by the respondent, Mr Holden was not able to rely on account of profits for the relevant event.  He referred the Court to the First Holden Affidavit where Mr Holden gives evidence about damage to his reputation as a DJ, particularly at [35] where a potential loss of any bookings occurred as a result of the conduct of the respondent.

2. Mr Chatterjee submitted that $1,500 would be a reasonable sum to award to Mr Holden in respect of the loss of opportunity to perform at the 21 November 2009 Event as well as a further $1,500 for the potential loss of opportunity to play at another event in Perth at that time.  There is a nebulous claim in relation to reputational loss to Mr Holden, nonetheless, the Court has before it a wealth of material evidencing Mr Holden’s reputation at the time of the 21 November 2009 Event as one of Australia’s premier DJs, being active in the industry for approximately 30 years, particularly in his musical genre.

3. Mr Chatterjee referred the Court to the Second Holden Affidavit at Annexure “A” where a selection of press clippings in respect of Mr Holden’s career appears.  Mr Holden gives evidence that he is a meticulous performer and has never missed an event, takes considerable time to prepare for each performance and has always performed for the full duration he has been engaged to. 

4. Mr Chatterjee contended that possibly 200 or 300 people would have bought tickets and attended the 21 November 2009 Event expecting to see Mr Holden perform.  They did not see him perform and would have left disaffected.  These people are part of his wider audience who buy music CDs and there definitely would have been a negative impact on Mr Holden’s reputation.  For those reasons Mr Chatterjee submitted that an amount of $3,000 was sought by Mr Holden in general terms for loss of reputation.

5. Leave was granted for further evidence to be put on in respect of quantification of damages and the Third Holden Affidavit was filed on 26 April 2013.  In this affidavit Mr Holden states that he performed at nightclubs in Perth approximately two or three times per year in the years prior to 2009 and would normally charge $1,500 per performance.  Since the 21 November 2009 Event Mr Holden has not been approached to perform in Perth.  He states that DJs who do not play at the premier nightclubs in any given city or location lose status as their not playing tends to suggest the DJ is unable to perform at that level.  The Villa Nightclub, where the 21 November 2009 Event took place, was one of those places.  It is Mr Holden’s belief that the actions of the respondent caused both the Villa Nightclub and Perth event promoters in general to believe that he was unreliable and no longer book him to perform.  As a result, he was deprived of the chance to perform at the premier club and reap any associated benefits that may flow on from there.

Consideration

1. When the matter was called before the Court for final hearing there was no appearance by the respondent, nor was there any explanation provided for his non-appearance.  This had occurred on two previous occasions where the matter had been listed for directions before me, as was the situation before his Honour Smith FM when the matter was before him.  That resulted in the making of orders of 26 October 2012, being that the applicant succeeded against the respondent as the respondent failed to appear.  Nothing has been filed by or on behalf of the respondent indicating that he wished to defend the proceedings.  Consequently, I make the order in respect of the payment of the sum of $650.00 as sought by the applicant under Order 2 as contained in the Application.

2. I now move to the issue of damages and accept that the quantification of damages in these proceedings presents difficulties for a number of reasons.  Due to the failure of the respondent to appear or respond to these proceedings it has not been possible to summon an amount of the money earned from the 21 November 2009 Event indicating the proceeds of staging that event for which a portion could be attributed to the purported performance by Mr Holden.  There is also affidavit evidence contained in the First Holden Affidavit indicating that it was likely he would not have been called to Perth for some time prior and some time after 21 November 2009 Event, resulting in a cooling off in relation to Mr Holden’s name in the minds of the public who normally attend this type of dance party event.  A consequence of that cooling off effect may have been a lost chance or chances for further income through performances in Perth by Mr Holden.  I will return to this issue in more detail below.

3. Mr Holden’s unchallenged affidavit evidence is that his standard fee for an appearance at an event of this nature is in the vicinity of $1,500.00 per evening.  I accept the submissions made by Mr Chatterjee that $1,500.00 would be reasonable for the damage incurred for loss of chance to participate in the 21 November 2009 Event and a further $1,500.00 for the loss of an opportunity to participate in another event at about that time.  The aspect of the claim in relation to the reputational loss to Mr Holden is more difficult, however, there is considerable affidavit material evidencing Mr Holden’s reputation, at the time of the 21 November 2009 Event as one of Australia’s premier DJs in this field of music, in which he has been active for approximately 30 years.  In support of this claim there are a number of newspaper articles annexed to Mr Holden’s affidavits sworn in these proceedings.  These articles indicate that Mr Holden was the headline billing for these dance parties.  His affidavits indicate that he allocates a considerable amount of time to prepare for an event, has never missed a performance, and always plays for the full extent of the booking.

4. The situation in this matter bears some differences to other passing off cases where the reputation of the applicant is not necessarily directly affected and can be characterised as a type of an affiliation, where in this matter Mr Holden was advertised to actually perform at the 13 June 2009 event, with possibly 200 to 300 people having bought tickets expecting to see him perform, but he ultimately did not appear.  That would have resulted in a number of the patrons leaving the event dissatisfied.  In the past a substantial number of the audio CDs that have been compiled by Mr Holden are sold to the audience attending his DJ performances.  Mr Holden maintains that there would be a definite negative impact on his reputation that is personal to him and not a broader dispersed impact.  Mr Chatterjee submits that an appropriate amount of damages would be $3,000.00 for loss of reputation.  I indicated to Mr Chatterjee that I would grant some additional time during which supporting evidence, in the form of an affidavit, could be prepared to assist the Court in the quantification of the reputational damage suffered by Mr Holden.

5. Subsequently, on 26 April 2013, Mr Holden filed a further affidavit setting out the circumstances of the impact of the respondent’s action in respect of the 21 November 2009 Event.  Mr Holden, in his affidavit, states that:

   2.  In the years prior to 2009, I played in Perth two or three times per year.

   3.  The Respondent advertised that I would play at Villa Nightclub in Perth on 21 November 2009.  He did not inform me, nor make any arrangements for me to actually appear at that event and consequently I did not appear as advertised.

   4.  I have not been approached to play any engagements in Perth or surrounding regions subsequent to this date.

   5.  In around 2009, I would usually charge $1,500 to appear at an interstate venue, such as Villa Nightclub.

   6.  In the DJ industry, in each city at any given time there is normally one club or venue that is at the forefront of the music scene.  This is the venue that sets the trends and that attracts the most popular talent.  The club scene is very competitive and novelty driven and such clubs hold their status for only a few years at the most.

   7.  An engagement at these clubs is recognition of a DJ’s status and popularity.  It tends to lead to further engagements both in that city, as other venues vie to attract the DJs who have played at these clubs; and in other cities as promoters look at these clubs interstate as an indication of the most popular talent.

   8.  Furthermore, DJs who do not regularly play these clubs lose status since this tends to suggest that the DJ cannot perform at that level.

   9.  In Perth, at and around the end of 2009, the Villa nightclub was one of these clubs.  I had not played there before as it had only opened earlier that year.  I had played at Perth’s previously essential club Lederville Hotel on a number of occasions.  Unfortunately, I no longer have records or the invoices from that time.  Annexed and marked “PH1” is a true copy of a poster for an engagement at the Lederville Hotel in around 2007.  This is a full page ad taken out in the industrial press.  Also attached and marked “PH2” is a similar advertisement from the leading nightclub at the time, Church, in Adelaide, also for an engagement in around 2007.  As can be seen I am given a top billing, with a half page insert alongside the remainder of the performers for that month.

   10.    I believe the respondent’s action caused Perth promoters in general, and the Villa Nightclub in particular, to believe that I was unreliable, and would not turn up for booked engagements.  I have not received an offer for an engagement with Villa Nightclub since.  The result of this was that I was deprived of the chance to play at the essential club and to reap the attendant benefits in terms of reputation and the further engagement that would normally flow from playing there.

1. I cannot say exactly what Mr Holden’s position would have been due to the lack of more specific evidence.  Nonetheless, as the Full Court of the Federal Court said in Enzed Holdings Ltd & Ors v Wynthea Pty Ltd & Ors (1984) 4 FCR 450 at [68]:

   The principal is clear.  If the court finds that damage has occurred, it must do its best to quantify the loss even if a degree of speculation and guesswork is involved … We emphasis, however, that the principle applies only when the court finds that loss or damage has occurred.  It is not enough for a plaintiff merely to show wrongful conduct by the defendant.

2. On the material before me I believe that it is reasonable that Mr Holden could reasonably expect that he would be retained for at least two, and possibly three, bookings in Perth during 2010.  Further, it is not beyond reason that the cumulative effect of those performances could lead to further bookings in the following year.  On that basis I am satisfied that an amount of $6,000 should be awarded to Mr Holden for damage done to his reputation.  I acknowledge that the expected life of a particular venue may only be in the vicinity of two years with other new and competing venues emerging.  Based on the Holden Affidavit if the Villa Nightclub ceased to hold its role as the premier music venue in Perth it is not unreasonable to believe that an emerging venue may seek to offer opportunities to Mr Holden on the basis of his reputation established at the premier venue during 2009 and 2010. In the circumstances I am satisfied that the final orders sought should be made.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Judge Lloyd-Jones

Associate: 

Date:  12 July 2013