Togher and Anor v Alexander and Ors (No.2)

[2019] NSWDC 221

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Togher & Anor v Alexander & Ors (No.2) [2019] NSWDC 221

Hearing dates:

13 - 17, 20 – 24 May 2019

Date of orders:

04 June 2019

Decision date:

04 June 2019

Jurisdiction:

Civil

Before:

Abadee DCJ

Decision:

See paragraph 396.

Catchwords:

CONTRACTS – capacity of unincorporated association to contract – whether a verbal contract existed – whether promise to pay professional fees incomplete –whether consideration given for variation of subject matter - whether contract was breached.

 

CLUBS AND ASSOCIATIONS - Capacity of unincorporated associations to enter into contracts – parties to the contract

 

AGENCY - whether implied authority in agent arising from principal’s acquiescence – whether ostensible authority – inferences drawn from absence of evidence of rules governing unincorporated associations

 

ESTOPPEL – res judicata - issue estoppel – whether claimant a privy in interest to another party in the latters’ settled proceedings.

 

DAMAGES – where expenditure in reliance upon a promise exceeds amount of the promised payment – whether damages recoverable for loss of reputation.

  PRACTICE & PROCEDURE – addition of committee members of unincorporated associations to claims made against and on behalf of unincorporated associations

Legislation Cited:

Associations Incorporation Reform Act 2012 (Vic)
Australian Charities and Not-for-Profits Commission Act 2012 (Cth)
Corporations Act 2001 (Cth)
Evidence Act NSW [1995]

Cases Cited:

Anemtech Ltd v Eyres Reed McIntosh Ltd (1986) 10 ACLR 780
Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Boncristiano v Lohmann [1998] 4 VR 82
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Bradley Egg Farm v Clifford [1943] 2 All ER 378
Clark v Macourt (2013) 253 CLR 1
Commissioner of Taxation v Sara Lee Household & Body Care (Aust) Pty Ltd (2000) 201 CLR 520
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Corpers (No. 664) Pty Ltd v NZI Securities Australia Ltd (1989) ASC 55 - 714
Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Company Pty Ltd (1975) 133 CLR 72
Crampton v Nugawela (1996) 41 NSWLR 176 at 195
Di Bello v De Costi Seafoods (Holdings) Pty Ltd [2005] NSWCA 267
Egyptian International Foreign Trade Co v Soplex Wholesale Supplies Ltd (The Raffaella) [1985] 2 Lloyd’s Rep 36
Essington investments Pty Ltd v Regency Property Pty Ltd [2004] NSWCA 375
Fink v Fink (1946) 74 CLR 127 at 143
Freeman & Lockyer (a Firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
Fry v Smellie [1912] 3 KB 282
Hadley v Baxendale (1854) 9 Ex 341 at 354
Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298
Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 480
Henderson v Curtis [2008] WASC 283
Herbert Clayton & Jack Waller Ltd v Oliver [1930] AC 209
Hollis v Vabu Pty Ltd (2001) 207 CLR 21
Howard Smith & Co v Varawa (1919) 26 CLR 183
Mackay v Dick (1881) 6 App Cas 251
McCrohon v Harith [2010] NSWCA 67
Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146
Pacific Carriers Ltd v BNP Paribus (2004) 218 CLR 451
Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 71
Pavey & Matthews Pty Ltd v Paull (1987) 162 CLR 221
Robinson v Harman (1848) 1 Exch 850
Rush v Nationwide News Pty Ltd (No.7) [2019] FCA 496
Russell Gould Pty Ltd v Ramangkura (No.2) [2015] NSWCA 14
Seiwa Australia Pty Ltd v Beard (2010) 75 NSWLR 74
South Sydney DRLFC v News Limited (2000) 177 ALR 611
State of NSW v Lepore (2003) 212 CLR 511
Thompson v Palmer (1933) 49 CLR 507
Tomlinson v Ramsay Food Processing Pty Ltd (2015) 256 CLR 507
Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101
Ward v Eltherington [1982] Qd R 561

Texts Cited:

K Fletcher, The Law Relating to Non-Profit Associations in Australia and New Zealand (LBC, 1986)
Australian Concise Oxford Dictionary
Bowstead & Reynolds on Agency (21st ed, 2018)
Cheshire & Fifoot Law of Contract (11th Australian ed)
G Dal Pont, Law of Agency (3rd ed)
J F Keeler, ‘Contractual Actions for Damages against Unincorporated Bodies’ (1971) 34 Mod LR 615
Law of Charity (2nd ed, 2017)
LexisNexis Concise Australian Legal Dictionary
Restatement of Agency (3rd ed)
Spencer Bower & Handley Res Judicata (4th ed)

Category:

Principal judgment

Parties:

Mr Alexander (Claimant)
Mr McClure (First Cross-Defendant)
Mr Harkness (Second Cross-Defendant)

Representation:

In person.

File Number(s):

2017/166111

Publication restriction:

Nil

content

INTRODUCTION

Nature of the case

Procedural background

Issues

FACTUAL BACKGROUND

Mr Alexander’s evidence

Ms Hill’s evidence

Mr Wilson’s evidence

Mr Togher’s evidence

Mr McClure’s evidence

Mr Harkness’ evidence

Ms Buckley’s evidence

Ms Hancock’s evidence

CONSIDERATION

Mr Alexander’s submissions

Mr McClure’s and Mr Harkness’ submissions

Credit

Underwriting agreement or loan agreement?

Was Mr McClure authorised to bind SOCIA Church to agreement with Mr Alexander?

Authority of Mr Harkness to bind Grace Missions and appoint Mr McClure as agent

Was the agreement entered into in March 2016 enforceable?

Special defences of res judicata and issue estoppel

Breach of Contract

DAMAGES

Expenditure in reliance upon promise

Professional fees

Loss of reputation

Exemplary damages

SUMMMARY & ORDERS

Judgment

INTRODUCTION

Nature of the case

1. This case arises out of a failed attempt to put on a music festival in Melbourne in early 2017 and, for practical purposes, ultimately raises the question of who should bear the losses of the investment of monies made towards that failed venture.

2. Mr Trevor Alexander has had extensive involvement in the performing arts over the last 40 years, in several capacities, including but not limited to being a theatrical producer. In more recent years, he asserts that he also been a member of the Church of SOCIA, which is a registered (but unincorporated) charity. In this latter capacity, Mr Alexander has had dealings with Mr Malcolm McClure, a Minister of the Church; and also Mr Zenaan Harkness, another Minister. Both Mr McClure and Mr Harkness say they are members of the committee of SOCIA Church. ‘SOCIA’ is an acronym and abbreviation for ‘Spirit of Christ in Action’. The Australian Charity and Not-For-Profits Commission Charity Register summary indicates that the charity is intended to benefit the ‘General community in Australia’.

3. Grace Missions is another registered (and unincorporated) charity. The ACNC Charity Register records that Grace Missions is a charity that has the purpose of benefitting Aboriginal and Torres Strait Islander people, the general community in Australia and unemployed persons.

4. The SOCIA Church and Grace Missions:

1. share the same charity street address and landline telephone number;

2. were registered, as charities, on the same date;

3. each have Mr Harkness as the responsible ‘Public officer’.

5. In or by March 2016 Mr Alexander says that he conceived the idea of putting on a Gala New Year’s Eve opera spectacular for 31 December 2016. He says he put this idea to Mr McClure and Mr Harkness and asserts that, on behalf of the SOCIA Church, they appointed him to be the ‘creative and artistic director’ to bring such spectacular (and subsequent like projects) to fruition. He says this appointment was part of a verbal agreement that he entered with the SOCIA Church; by which he would essentially put together the project and SOCIA would provide the finance for it, by depositing into an account, in the name of Grace Missions, the sum of $100,000. From this fund, Mr Alexander says it was agreed that he could withdraw monies in order to meet production expenses. After the performances, and separately, his own professional fees as the artistic director would be paid.

6. In about May 2016, Mr Alexander held ambitions for a larger event which would extend beyond a mere performance on New Year’s Eve. He wanted to have a series of theatrical performances throughout January 2017.

7. For Mr Alexander, the experience from the middle of 2016 until early January 2017 was not a happy one. He says that contrary to what he had been promised by SOCIA Church by Mr McClure, there was no account of $100,000 which could be used to meet production expenses. This, according to Mr Alexander, meant that, in this particular period, he had to find his own resources to fund the production expenses (predominantly, although not exclusively, by access to monies held in a company, ‘Goddess Reawakening’). He says that he received further assurances (subsequent to the verbal agreement of March 2016) from Mr McClure that monies would be placed into an account and that he would be subsequently reimbursed for the payments he had made since then. Then in December 2016, there were problems with Ticketek for the event on New Year’s Eve. This ultimately resulted in a lower than expected attendance on that occasion. In early January 2017, a meeting was called, which was attended by Mr Alexander, Mr McClure and Mr Harkness, and various artists who, to this point, were committed to performing events as part of a festival. Mr Alexander says that Mr McClure, on behalf of Grace Missions, represented that contracts to artists would be honoured. But very shortly thereafter, Mr Alexander asserts that Mr McClure absolved the Grace Missions of any responsibility to the artists, or, for the payment of any fees to Mr Alexander personally. He says he felt as if he was thrown under the bus.

8. For its part, Mr McClure and Mr Harkness, for SOCIA, and Mr Harkness, for Grace Missions, deny that there ever was any arrangement with Mr Alexander reached in 2016 or at any subsequent time, of the kind he alleges; or that Mr Alexander had been appointed as a creative director. They say that they had cautioned Mr Alexander against entering into a project without being satisfied that there was “money in the bank”. This, they say, was partly the product of bitter experience: that, back in 2014, Mr Alexander purported to act as the SOCIA Church’s agent in getting it to purchase a property at Warrigal. They say that the idea of the festival had occurred to Mr Alexander back in October 2015 (if not in August 2015), but Mr McClure had firmly indicated at that earlier time that the SOCIA Church would not get involved. Messrs McClure and Harkness said that, by March 2016, Mr Alexander had indicated to them that he was unable to obtain grants or other means of financing the festival. Mr McClure says that he advised Mr Alexander not to proceed until money was in the Bank.

9. They say that it was only in late July 2016 that SOCIA Church and Grace Missions stepped in to help out Mr Alexander. This, they also say, arose from Mr Alexander telling them that he was in financial trouble and needed help (having used up his own resources, and some of his mother’s superannuation). Mr McClure explained their motive for assistance: they could see that what Mr Alexander was proposing was beneficial to the Melbourne Arts industry, and the community generally and wanted to help. The help consisted of SOCIA Church and Grace Mission agreeing to make an arrangement between themselves whereby SOCIA Church would lend up to $50,000 to Grace Missions, and for the latter entity to on-lend that total sum to Mr Alexander, on a conditional basis, and upon the presentation of approved invoices rendered by Mr Alexander. They say this arrangement was entered into on or about 31 July 2016, and conveyed to Mr Alexander in early August 2016. In this way Mr Alexander would not have direct access, or control of the monies. There was, however, a catch: according to Mr McClure and Mr Harkness SOCIA would only pay Grace Missions when there was money available.

10. They say that approximately $49,000 was paid by SOCIA to Grace Missions, in unequal and irregular instalments and that these sums were distributed to Mr Alexander in the period from 1 August 2016 to early January 2017 after the receipt of between 12 and 15 invoices.

11. The payments stopped after New Years’ Day in 2017. Mr McClure and Mr Harkness say it was only soon after that, that people, such as Linda Buckley, who Mr Alexander had engaged to publicise and promote the Festival, had asserted that they had entered into contracts with Grace Missions. This had ‘shocked’ Messrs McClure and Harkness and they cut off further communications with Mr Alexander.

12. On 7 January, they received another demand from Mr Togher (see further below). Grace Missions says it agreed to utilise the last portion (about $7,000) of the $50,000 loan earmarked for Mr Alexander and refused to pay him any more. In July 2017, Grace Missions demanded Mr Alexander repay approximately $47,000 advanced to him.

Procedural background

13. Mr Alexander was the first defendant in a proceeding (commencing on 2 June 2017) brought by Mr Patrick Togher, and Mr Romola Togher, who, together, practised in a partnership called “Patrick Togher Artists’ Management”. That partnership was in the business of providing theatrical performance to appear in shows. The gist of their claim was that Mr Alexander, on behalf of Grace Missions, had procured the partnership to arrange for a number of actors to perform in one of the shows (“Some Enchanted Evening”) in early January 2017. This, the partnership said, it did and Grace Missions had failed to pay its invoice. The other defendants to the proceeding were Mr McClure and Mr Harkness.

14. This proceeding was disposed of pursuant to a consent judgment on 12 April 2018. Mr Alexander’s claim against Mr McClure and Mr Harkness is a cross-claim (filed 21 December 2017) in the proceeding commenced by the partnership. As will be seen, Mr McClure and Mr Harkness contend, as one of their defences to Mr Alexander’s claim, that the effect of the disposition of the Partnership’s claim (against all defendants) is to amount to an issue estoppel or res judicata which they contend precludes Mr Alexander from maintaining his claim.

15. By his cross-claim (21 December 2017), Mr Alexander effectively sues SOCIA and Grace Missions, through Mr McClure and Mr Harkness (as members of the committee) for breach of a verbal contract, for its failure to honour its alleged promises to provide the monies, as well as outstanding professional fees. Mr Alexander also seeks damages for loss of reputation on the basis that because Mr McClure and Mr Harkness (on behalf of the entities which they represented) breached the agreement, this has led to a loss of trust in Mr Harkness within the performing arts industry.

16. The parties were unrepresented at the trial. I was informed by Mr McClure that he and Mr Harkness were legally represented from late February 2018. This was until 6 May 2019 when they terminated their solicitor’s retainer.

17. Mr Alexander brought no other claim in promissory estoppel, for (statutory) misleading or deceptive conduct in trade or commerce, arising from non-contractual promises, for breach of warranty of authority; or for a quantum meruit.

18. Mr Alexander had also sued the SOCIA Church and Grace Missions; however, I was informed by Mr Alexander that those entities had been removed as defendants.

19. It appeared to me that Mr Alexander’s cross-claim was not properly constituted, in the sense that only Mr McClure and Mr Harkness were cross-defendants; when they were only two of six members of the committee of SOCIA. In my view, it was appropriate that all members of the committee at the date of the putative contract (March 2016) be added as cross-defendants. I return to this subject below when I address the topic of capacity of SOCIA and Grace Missions, as unincorporated associations, to enter into arrangements.

20. Mr Harkness brought a cross-claim (dated 13 April 2018), centred around Mr Alexander’s failure to repay the alleged debt to Grace Missions of slightly (with interest) in excess of $50,000 arising from the arrangement set out in paragraph 9 above. Mr Alexander denies the debt and says he had no need to borrow as at July 2016.

21. For the same reasons in relation to the constitution of Mr Alexander’s claim, I considered it appropriate to add, as an additional cross-claimant, Mr Graeme Peters, being the only other member of the committee of Grace Missions as at the date of the alleged agreement in July 2016.

Issues

22. Prior to the parties preparing their closing submissions, I indicated to them that I understood the issues to be (and requested that their submissions focus upon):

whether I should accept Mr Alexander’s account of verbal conversation with Mr McClure and Mr Harkness in March 2016?

whether a verbal agreement (constituted by the conversation) was reached in March 2016, and in particular:

who are the parties to the contract?

Was there legal capacity in the parties to contract?

Whether Mr McClure (and/or Mr Harkness) was authorised to bind SOCIA (through its committee of members) to an agreement with Mr Alexander?

Whether Mr Harkness was authorised to bind Grace Missions to any agreement with Mr Alexander?

What were the essential terms of the contract (including, without limitation, what was the consideration for any promises made on behalf of SOCIA or Grace Missions?

if such agreement was reached:

Was Mr Alexander authorised (by SOCIA Church, or Grace Missions) to enter into contracts on their behalf for the purposes of advancing the Festival?

Was the said verbal agreement breached by SOCIA Church and/or Grace Missions?

What if any loss arises from such breach? In particular, are damages recoverable for loss of reputation?

Is there an issue estoppel, arising from the compromise of the partnership’s claim against each of Messrs Alexander, McClure and Harkness (all on behalf of Grace Missions) that prevents Mr Alexander recovering against Messrs McClure and Harkness on his claim?

If there was no agreement in March 2016, was an enforceable agreement reached on or about 31 July or 1 August 2016, in the terms alleged by Mr Harkness?

If so:

Was that agreement breached by Mr Alexander?

What, if any, consequence does that have in connection with Mr Alexander’s claim?

FACTUAL BACKGROUND

Mr Alexander’s evidence

Dealings prior to March 2016

23. Mr Alexander swore no less than four affidavits in this proceeding; although one of them was not read.

24. A recurring theme throughout the affidavit evidence of Mr McClure and Mr Harkness was references to earlier, undocumented (or poorly documented) commercial transactions. This had not been referred to in Mr Alexander’s first affidavit.

25. One earlier transaction was the printing of books that Mr Alexander had written about Egypt; and a subsequent trip by Mr Alexander to Egypt. Mr Harkness said that he was not sure whether SOCIA or Mr McClure (personally) paid for the printing and said it was possible that Mr McClure had agreed to the printing of the books ‘off his own bat’. (Mr McClure subsequently acknowledged that he had paid for the printing personally) As to the Egyptian trip, Mr Alexander had put a written proposal to SOCIA Church. Mr Harkness was not aware of it being considered by the committee. Nevertheless, he said, SOCIA had agreed to fund it sometime after August 2015. There was no minute of such meeting.

26. Another was a conveyance, or purchase by, Mr Alexander and Ms Hill, of property in Warragul, in Victoria in 2014.

27. An issue in that earlier transaction was whether a promise had been made on behalf of SOCIA Church, to finance the balance of the purchase price after Mr Alexander and Ms Hill had paid the deposit. In separate reasons, I rejected the use of such evidence (in Mr Harkness’ affidavit) as showing any tendency on the part of Mr Alexander (for the purposes of section 97 of the Evidence Act NSW [1995]), whilst admitting it (under s 136) for the purpose of establishing the issue of whether or not Messrs McClure and Harkness agreed to enter into the transaction in March 2016. I determined that the events in relation to this earlier conveyance were relevant to the question of whether the SOCIA Church and Grace Missions likely would be prepared to lend, or provide, monies to Mr Alexander (or entities affiliated with him) for commercial or investment purposes. This was a distinction which Mr McClure and Mr Harkness did not fully comprehend and, at least in the case of Mr McClure, some cross-examination was focused upon the merits of the parties’ contestable claims in relation to this earlier transaction. The gist of the evidence was Mr Harkness and Mr McClure did not trust to enter agreements with Mr Alexander because of what they regarded as his conduct in falsely representing that he had authority on behalf of SOCIA Church to enter into a transaction that he represented was financed by SOCIA Church.

23. Under cross-examination, Mr Alexander said that between 22 December 2015 and 6 November 2015 he was in Egypt. Thereafter, he recalled having two meetings and various phone calls with Mr McClure up to the date of the meeting in March 2016. Mr Alexander said that the idea that he articulated in the meeting on March 2016 had emerged after he had seen a show on 13 February.

24. In relation to these two previous events, or episodes, Mr Alexander gave some evidence in reply. After the Warragul ‘fiasco’, (of late 2014), he said that at no stage thereafter (whether in March 2016, or 24 July 2016) did Mr McClure, or Mr Harkness indicate that they were not prepared, or no longer prepared, to engage in any further business dealings with him. In relation to the Egyptian trip, this trip had, in fact, been financed by SOCIA, in the sum of just over $20,000.

25. Neither Mr McClure nor Mr Harkness cross-examined Mr Alexander in relation to the handwritten notes of meetings that had occurred in August or October 2015; although they cross-examined Ms Hill in relation to the notes. Nevertheless, the notes bore Mr Alexander’s signature. Mr Alexander said that he applied his signature only on the basis of signifying his attendance at the meeting; without fully reading the notes; and in the expectation (in accordance with his experience) that the handwritten notes would be transcribed into typed form and circulated for his consideration and approval. This, he said, had not happened.

26. Mr Alexander further said that during the proceeding, he sought the production of the notes, even by means of filing of a notice of motion for discovery; and subsequent email requests. Despite these matters, he did not receive the handwritten notes until, virtually, the eve of the hearing.

Mr Alexander’s conception of ‘authority’

32. As will be shown, there were multiple documented references in Mr Alexander’s evidence where he described himself to third parties as being the ‘Creative and Artistic Director’ of one of a range of entities, including, but not limited to, Grace Missions. Examples of the entity of which he was the ‘Creative and Artistic Director’ were ‘Renaissance Opera’, the ‘Melbourne Musical Theatre Festival’. Part of his case in this proceeding was that he was also appointed as the Creative and Artistic Director of SOCIA. But although he described himself in this way, there was also evidence that ultimately, the invoices received from third parties were addressed to Grace Missions.

33. Mr Alexander explained to me that a different entity, to which he occupied the same position (creative and artistic director), was selected for different purposes. Thus, Renaissance Opera was identified in correspondence where Mr Alexander was seeking the services of persons associated with opera. This, Mr Alexander explained, was because of the reputation and goodwill of one entity within the subset of the art industry – there was little point, he explained to using the title of ‘creative and artistic director of a fish shop’ when trying to engage the services of someone within the operatic part of the arts community. As to the linkage between the entity of which he was a creative and artistic director (to whom correspondence was sent) and Grace Mission (to whom a supplier’s invoice may have been addressed) this reflected Mr Alexander’s differentiation between the entity ‘presenting’ itself to a third party (supplier) and the entity underwriting the project (Grace Missions).

March 2016 meeting

34. In his primary affidavit (23 May 2018) Mr Alexander referred to a meeting that occurred at his then residence in Drouin (Victoria) between himself and his partner (Christiane Hill), Mr McClure and Mr Harkness in March 2016. Certain parts of this affidavit were objected to and, without objection from Messrs McClure or Harkness, I granted leave and assisted Mr Alexander to elucidate, in evidence in chief, that evidence in proper form.

35. Mr Alexander recalled Mr McClure saying “we need to give you a position”, to which he, Mr Alexander, suggested in response, “Creative & Artistic Director of Creative & Artistic Projects for Church of SOCIA Australia”. Mr Alexander also recalled asking Mr McClure, “Do we need to run this through the (SOCIA) committee?” To this, Mr McClure responded “No no no, that will be fine. I’ve got the authority”. After this, Mr Alexander says he tabled his proposal. He says that they, being Mr McClure and Mr Harkness, looked to the proposal and asked how much it would cost. Mr Alexander recalls Mr McClure saying “we’ll set up the account under Grace Missions”. Reference was made to a sum of $100,000 being deposited.

36. Under cross-examination by Mr McClure it was put that Mr Alexander had only purported to appoint himself to this position. Mr Alexander rejected this. It was also put that there was no document which Mr Alexander had put in evidence to corroborate his position that he was a creative director (or held any other office) for SOCIA Church, or Grace Missions. Instead, a number of the emails which Mr Alexander put into evidence stated that he was a creative director of the Melbourne Musical Theatre Festival (put as another self-appointment); as well as other business names that had been registered through the company of which Mr Alexander was a director, relevantly ‘Goddess Reawakening’. These matters were accepted by Mr Alexander. It was further put to him that the position of creative director does not exist within SOCIA. Mr Alexander rejected this - saying that Mr McClure had appointed him.

37. Under cross-examination by Mr Harkness, Mr Alexander admitted that at this meeting, Mr Harkness did not (expressly) appoint Mr Harkness as Creative Director for Grace Missions. Mr Alexander said that it was Mr McClure who did so. This led Mr Harkness to ultimately say that Mr McClure did not have the authority to appoint Mr Alexander to any position on behalf of Grace Missions. It was also put that at no stage did Mr Harkness tell Mr Alexander that he was appointed as agent for Grace Missions. To this, Mr Alexander responded that he (Mr Harkness) said nothing when Mr McClure made the appointment. In response to questioning as to how many contracts Mr Alexander had signed in the name of Grace Missions, Mr Alexander thought there were up to 100 such contracts. None of these had been notified to Mr Harkness. This, Mr Alexander explained, was because that “did not seem relevant” at the time. Nor were there emails to Mr Harkness identifying a contract in the name of Grace Missions. As to this, Mr Alexander said that there were multiple emails he sent to Mr Harkness concerning his need for money. Mr Harkness put to Mr Alexander that such authority as he had from Grace Missions was limited to emailing invoices. This proposition was rejected. Mr Harkness elicited an admission from Mr Alexander that he passed on an email to himself and Mr McClure as a courtesy; in order to be open and transparent; but then put to Mr Alexander that he did not show the same openness and transparency by failing to notify himself (or McClure) the various contracts that Mr Alexander had entered into on Grace Missions, or SOCIA’s behalf. Mr Alexander said that, in his experience and practice, a creative director could not practicably forward on all contracts to the underwriter of an event.

38. In re-examination, Mr Alexander elaborated that, in his experience, for events, or festivals of the kind under consideration in this proceeding, there is a distinction between the roles of a creative and artistic director and an artistic administrator. Typically, the role of the latter position was to do contract bookings. Mr Alexander explained, essentially, that because the underwriting was limited to $100,000, in order to make savings, he generally took on this role (as ‘artistic administrator’), unless there were occasions (such as the booking of the MCEC as the venue for the NYE performance), the owner of the venue sought to directly speak with the underwriter. (Another exception was the PTMP performers). Mr Alexander intimated that Mr McClure and Mr Harkness were content to allow Mr Alexander to perform the role of administrator and that this did not require him to disclose details of every contract for every performer he was engaging (in the joint capacity) of being the creative and artistic director.

39. In respect to what would happen with the revenue from this (and any other) project, Mr Alexander says that he told Mr McClure that “the money should go back into the account for future projects”. He recalls Mr McClure saying “Yep, that seems fair”.

40. In relation to his own fees in connection with this project, Mr Alexander says that he told Mr McClure “I would defer all my professional fees until after the concert had finished”. He says that Mr McClure responded “that’s very generous of you.” Mr Alexander accepts that, at this point, there was no discussion of any fixed fee for him; although he says that he told Mr McClure that he would put his fees in writing; to which Mr McClure responded “that’s fine.”

41. There were four important aspects to the parts of Mr Alexander’s primary affidavit, relating to this meeting. First, Mr Alexander’s position was that he took a purely voluntary appointment: meaning no salaries, wages or stipends. I found it difficult to understand what was meant by this, given his evidence about an agreement to pay him (albeit on a deferred basis) his fees. This appointment was not recorded in writing. Instead, Mr Alexander says, Mr McClure and Mr Harkness shook Mr Alexander’s hands. Mr Alexander interpreted this to amount to their congratulations upon his appointment.

42. The second aspect of the discussions was Mr McClure tabling, or proposing, a project to establish the performance of the show ‘Aida’, as part of a 2016 New Year’s Eve spectacular at the Melbourne Convention and Exhibition Centre (MCEC). Mr Alexander said he told Mr McClure and Mr Harkness, in response to Mr McClure’s question as to cost, that if he deferred his own fees as a director, set designer and administrator until after opening, it would take an initial sum of $20,000, with around $100,000 in total, to cover the setup costs to opening night. After that, box office (revenue) would cover all subsequent costs such as his fees, other production expenses and production management fees which could all be paid post opening performance out of the box office returns. He says he provided an estimate of a potential net profit of between $1.5 - 2.5 million.

43. Under cross-examination, Mr McClure put to Mr Alexander that he told him not to move on with the festival until there was money in the bank, and/or that he was confident that he had the money. Mr Alexander rejected these propositions. Mr McClure also put to Mr Alexander that he had told Mr McClure that he would be able to get grants, Mr Alexander denied this: he said that one would never assume that one could get grants. Mr McClure put to Mr Alexander that in the meeting on March 2016 he had described Mr Alexander as being a “reckless bull in a china shop”. Mr Alexander denied him saying this. Mr McClure again put to Mr Alexander that he advised him to make sure that there was money in the bank. Mr Alexander denies him saying this.

44. It was put that reference was made during the March 2016 meeting to the “Warragul” event - an unhappy transaction involving all of the protagonists. Mr Alexander responded that it was only his partner, Ms Hill who raised the reference (saying that she did not wish to have a repeat about Warragul). Mr McClure put to Mr Alexander that he told him “I don’t want to see you repeat Warragul”. Mr Alexander rejected this.

45. The third feature was a verbal agreement as to the respective roles of SOCIA Church and Grace Missions. In his primary affidavit, Mr Alexander recalled that SOCIA would ‘underwrite’ the event. Further, he recalled that the project was to be financed by a bank account in the name of ‘Grace Missions’. Into that account a sum of $100,000 would be deposited, to deal with establishment costs. This was, (he says) it was agreed, an account that would be established with funds deposited, by 1 May 2016.

46. Mr Alexander was challenged by Mr McClure that it was untrue that any promise was made to set up a bank account. Mr Alexander rejected that proposition. It was put to Mr Alexander (by both Mr McClure and Mr Harkness) that it could not be the case that any such promise was made; since Mr Alexander had indicated to them that he would be seeking funding through grants. Mr Alexander explained that although he was always interested in obtaining grants, he would never budget on the assumption that they would be received. As it was, after 1 May 2016 had passed, and he had learnt that no bank account had in fact been set up, he attended various workshops in order to learn how to apply for the grants.

47. Separately, Mr Harkness also challenged Mr Alexander about any promise of a bank account in the name of Grace Missions in March 2016. It was put that the fact that Mr Alexander was exploring grants for the project was indicative of the absence of any promise that a bank account would be set up. Mr Alexander denied this proposition and explained that he was exploring grants since the project would be a major event for Melbourne. He further explained that the $100,000 promise was referable to underwriting of the New Year’s Event. Mr Harkness also put to Mr Alexander, rather curiously, but I consider significantly, that Mr Alexander’s statement in the meeting about anticipated net profit of $1 – 1.5 million might have acted as an inducement to any agreement to deposit $100,000 into the bank account with Grace Missions.

48. A fourth feature was, according to his affidavit evidence, in respect to the quantum of his fees (whose payment was to be deferred), such as direction, production, managing and designing, any such fee as would normally have to be allocated to a third independent person to “do the same job”. I asked Mr Alexander when he budgeted for his professional fees. He said that this had occurred after the period between May and June 2016. He said that the $100,000 was not to be utilised for his fees – this was only to underwrite the event. His fees were expected to come out of the Box Office takings.

49. Mr Alexander said in his affidavit that he had strongly indicated to Mr McClure that his head was ‘on the chopping block’, in that it was important to his reputation with participants in the performing arts industry that the funds that were promised would be made available.

50. This arrangement was said to be verbal only. Mr Alexander asserts that the meeting had been minuted and that he and his partner, Ms Hill, requested a copy of the minutes; however that had never occurred. For their part, Mr McClure and Mr Harkness says that any meeting on March 2016 was no more than a catch up call, which explained why they did not take any notes on that occasion. They emphatically deny that any notes or minutes were taken of the meeting.

Events after March 2016

51. Mr McClure put to Mr Alexander that the latter had had communications with him concerning an expense incurred from Goran Docjinovic as early as April 2016. Mr Alexander disputed this, but accepted that there were communications about the progress of the Gala Event at this time (though Mr Alexander denied that there was a discussion about grants).

52. In re-examination, Mr Alexander referred to several conversations with Mr McClure (though not about the expenses claim of Mr Docjinovic) up to the middle of 2016. This included invitations to attend workshops for the purposes of obtaining grants and meetings with the MCEC, and an invitation to attend the venue earmarked for the (then) New Year’s operatic performance.

53. In his primary affidavit, Mr Alexander said that by 1 May 2016 an account (with a $100,000 balance) in the name of Grace Missions not been established. His affidavit evidence was to the effect that it was not until about August 2016 that any funds had been received by or on behalf of SOCIA Church. In the meantime Mr Alexander was busy taking steps to develop the project. This included his establishing, through a company in which he and Ms Hill were directors (“Goddess Reawakening”), a registered business name, titled ‘Melbourne Musical Theatre Festival’. About this time, Mr Alexander said in his evidence in chief that he rang Mr McClure and informed the latter that “it’s not going to cost any money to expand into a festival because of the infrastructure costs”. He recalls Mr McClure saying “How much more?” and his replying “it won’t cost any more, but we’re going to increase profits.” He recalls Mr McClure saying “we should go ahead and do it”. In June he also recalled transforming the nature of the event for New Year’s Eve (not pursuing the opera ‘Aida’, but instead staging a concert called ‘Viva Verdi’.

54. For much of the period between 1 May and the end of June 2016, according to his primary affidavit, Mr Alexander repeatedly enquired of Mr McClure as to why an account of $100,000 was not available for his use and, according to his evidence, repeatedly received assurances that the funds would be provided. A common explanation, according to Mr Alexander, was that Mr McClure explained that SOCIA was awaiting the receipt of a bank loan. He said that he rang Mr McClure and, with Ms Hill listening on, Mr McClure told them both that money was coming in and that if they could cover any initial costs he would reimburse them.

55. Mr Alexander was challenged, by both Mr McClure and Mr Harkness, under cross-examination, as to any promise of reimbursement. In response to questioning by Mr McClure, he was unable to demonstrate, by reference to the annexure is to his affidavit, any document providing written confirmation of this particular verbal commitment. He was also challenged on his assertion, in his primary affidavit, that numerous emails have been sent to Mr McClure. Given the opportunity, Mr Alexander did in fact demonstrate that there were numerous emails sent to Mr McClure that were annexed to his primary affidavit. In response to questioning by Mr Harkness, it was put that there was no arrangement to reimburse (on behalf of Grace Missions). Mr Alexander said that the arrangement was with Malcom (McClure) – it was only recently did he consider the possibility that Grace Missions was separate to SOCIA.

July 2016

56. In late July 2016, Mr Alexander’s partner, Ms Hill, visited Germany for a period of about six weeks. In that time, Mr Alexander recalled, he utilised funds from Goddess Reawakening to meet the expenses of the project. This included payment for such things as website design and venue hire. It appears that this was unauthorised: Ms Hill was most displeased to discover, upon her return in August 2016, that Mr Alexander had withdrawn $5,000 from this entity’s account. According to Mr Alexander’s affidavit, he was spurred by Ms Hill to ring and press Mr McClure for money. Following this enquiry, a sum of $2,000 was deposited into the Goddess Reawakening account.

57. Mr Alexander made no reference in his affidavits to any loan agreement reached with Grace Missions in late July 2016. Mr Alexander accepted that there may have been a phone call in or about 23 or 24 July however that was only referable to evidence that had been given by a witness for the Messrs McClure and Harkness: Ms Buckley.

58. Mr McClure put to Mr Alexander that the only financial support provided was that which had been provided after a telephone call on 24 July.

59. Mr Harkness put to Mr Alexander that email and other messages he had sent to Mr Harkness after July were consistent with a loan agreement entered into in July 2016. Mr Alexander denied that there was any agreement in July, and denied a phone call with Mr Harkness on 24 July. He also put to Mr Alexander that he, Mr Alexander, had approached Mr Harkness on 24 July because his efforts at obtaining grants had been unsuccessful – because he was desperate for the money to ‘rescue’ the festival. Mr Alexander responded that, to that point, he had only spent a small amount of his own money. Mr Harkness put it to him that he had urgent invoices that required payment. Mr Alexander said that whilst invoices may have been pressing, they were not urgent. Mr Alexander accepted the proposition that the first monies received from Grace Missions only occurred in August 2016.

August – December 2016

60. From August to September 2016, according to his affidavit, Mr Alexander continued to make payments for project expenses: this included a deposit for the Athenaeum Theatre, office furniture and the first payment for the marketing and PR firm ‘Encore’ (whose principal was Ms Lynda Buckley, a witness called for Messrs McClure and Harkness).

61. According to Mr Alexander’s primary affidavit the same pattern continued from September through to December 2016: Mr Alexander arranged for the payment of expenses for the festival (such as marketing, the band, costumes, office rent, program ads, the set for the production, symphony services) by himself or through Goddess Reawakening; Mr Alexander asked Mr McClure about the status of the monies in the bank account. Mr McClure would make assurances to reimburse Mr Alexander (or Goddess Reawakening) for the payment of expenses.

62. Under cross-examination Mr Alexander was referred to an email he sent on or about 22 October 2016 to the MCEC. The import of the cross-examination was that Mr Alexander had falsely represented to be acting, and or dealing with that organisation, as an agent for Grace Missions and made unauthorised statements as to its financial position. Mr Alexander rejected this.

63. Mr Alexander recalled that around 15 December 2016, Ticketek ‘reneged’ on its promise to ticket the New Year’s Eve Gala concert at the MCEC. Mr Alexander said, in his evidence in chief, that he said to Mr McClure “Ticketek had pulled out of the agreement. What do you want me to do? Do we cancel the whole thing or relocate the concert?” He recalls Mr McClure asking “what are the ramifications?” to which Mr Alexander responded “we could go to the Athenaeum, but we could do a Mozart concert.” He says Mr McClure said “if we cancel (the Viva Verdi) concert how much do we lose?” Mr Alexander says he responded “probably $5-6,000 (but) we could make it up to recover costs for the concert. Barry Jane from the Athenaeum promised to send out an EDM to its customer database”. He says Mr McClure responded “Okay. That’s good to know.” When Mr Alexander asked him what to do, Mr McClure said “Go ahead and put the smaller concert on at the Athenaeum.”

64. On New Year’s Eve, prior to the concert, Mr Alexander recalls Mr McClure addressing the orchestra. In his affidavit he recalled Mr McClure thanking them for their involvement and telling them that Grace Missions looked forward to creating and supporting many more such concerts. Mr Alexander made a point of publicly acknowledging Grace Missions and Mr McClure for financially supporting the concert and supplying a baby grand piano. Regrettably, the New Year’s Eve Gala performance was poorly attended. Mr Alexander attributed this to Ticketek’s conduct.

Events in early January 2017

65. Mr Alexander said in his primary affidavit that on 2 January 2017, Mr McClure instructed him to call a meeting of all of the administrative, performance and production personnel involved in the festival for the following day. This Mr Alexander did by email.

66. On the next day, 3 January 2017, Mr Alexander attended a meeting with the cast and crew at which Mr McClure was present. Mr Alexander says that he introduced Mr McClure to the cast and crew as the ‘Executive Producer’ a description which, he says, elicited no contradiction from Mr McClure. Mr Alexander recalled Mr McClure informing the cast and crew that Grace Missions would lose $70,000 for the performance, but would still pay the artists and honour “our” part of the deal. He recalled Mr McClure telling the audience that he wanted to “try and honour what we’ve done, to honour Trevor and to honour you all”. Nevertheless, he recalled Mr McClure saying that he had responsibility as a secretary and treasurer in his organisation (SOCIA Church) and he was not allowed to throw money away. Almost in the next breath, Mr Alexander recalled, Mr McClure said that we were trying to shore up the industry for 20 or 30 years. At about this point, Mr Alexander recalled Mr Harkness spoke. According to Mr Alexander, Mr Harkness said that he spoke as the “fiscally responsible hat to Grace Missions” and that, from its perspective, there had been a loss of $60-$70,000 as well as $80- 90,000 for Alex and his family. He said that he regarded the state of affairs as amounting to a fiscal disaster and an organisational mess and foreshadowed that he could not, in good conscience, give his consent that proceedings continue. Mr Harkness expressed his concern that his organisation might be expected to contribute another quarter of a million dollars.

67. Mr Alexander recalled Mr McClure making the following statement:

“I’ve given over $1.4 million of my own money into the community, so I’m a very generous guy that likes to honour people. I do things on handshakes, right; if I say it’s gonna be done it’ll be done. There was no contract between the Grace Missions have with Melbourne Musical Theatre Festival, we didn’t do a contract cause we’re men of honour. If you got to write things down on paper then I’d be dead, that means there is no honour. But I am of the old school that says honour.”

and

“the easy part for me to take, .. would be just, right, finished and just walk out like one of those bankers and say right again to foreclose on you or and the house, and walking out now and I don’t care about anybody’s feeling or anything, this is all about business is money

68. Mr Alexander recalled Mr Harkness then explaining that it would take time to satisfy payments and further obligations (being $50,000); but then Mr McClure interrupted him by saying “..and we are going to do it.” Mr Harkness then said:

“we can’t honour in the short term because we’re, we spent a whole bunch of money, and New Year’s Eve is another 50 grand that we now have to honour, and whatever we have to honour we’ll honour”.

69. Mr Alexander recalled Mr McClure saying:

“We didn’t sign any contracts. We are underwriters”

and

“because we’re already on a handshake and on honour, just going to honour the Mozart To Midnight, and with Trevor as well, we’re gonna some costs and make that happen and pay. Even though we don’t have too, we’re going to do it”.

70. Mr Alexander recalled, in his primary affidavit, a meeting at 7 PM on 3 January 2017 which was attended by Glenn Elston, Mr McClure Mr Harkness, Goran Djcinovic, Lynda Buckley and himself. Mr Alexander introduced Glenn Elston to Mr McClure and Mr Harkness as being the “the guys who pull the purse strings on everything”; a description which he recalled was not contradicted. What followed was, principally, Mr McClure describing what might be done to bring a lawsuit against Ticketek. Amongst other things, he indicated that there was a need for the Athenaeum to help out; and he referred to his “interest here to protect the Melbourne Musical Theatre Festival.”

71. At a point during the meeting, Mr Alexander recalled, Mr Elston asked Mr McClure whether he could get some other contacts and Mr McClure responded “just go through Trevor, he is the agent”. This response was not good enough for Mr Elston: he said that Mr Alexander was not the one writing the cheques and that he wanted to write directly to the people who were controlling the money which he believed was you (Mr McClure) and yourself (Mr Harkness).

72. In a subsequent discussion with Mr McClure that same day, Mr Alexander says that Mr McClure instructed him to cancel the festival save for the performance ‘Some Enchanted Evening’ until such time as he could secure the removal of SOCIA’s piano from the premises.

73. On 4 January 2017 Mr Alexander notified artists and members of the orchestra from the New Year’s Eve concert that there would be a meeting.

74. On 6 January 2017 the performance of ‘Some Enchanted Evening’ was cancelled. Mr Togher gave evidence of a telephone hook up with Mr Alexander, Mr McClure and Mr Harkness. After the performances of 3 of ‘his’ artists on the New Year’s Eve, he was seeking payment for them and was interested to know what would become of the ‘Some Enchanted Evening’ event in which he had 4 artists performing. He learnt that this, and the other events, were to be cancelled. He was informed that there was a need to cancel because of Ticketek. He recalled Mr McClure telling him that the festival had to be cancelled as Ticketek had been derelict in its duty.

75. On 8 January 2017, whilst he was driving (and with Ms Hill in the passenger seat) Mr McClure rang him to say that SOCIA would no longer pay out any of the contract, that they had nothing to do with them and that it was all Mr Alexander’s fault.

76. Mr Alexander calculated that his budgeted professional fees for services for the various productions were $113,500. He asserts that the failure (of SOPHIA and Grace Missions) to honour their contracts and promises had ‘irrevocably’ damaged his reputation as a man of integrity in the performing arts industry.

77. Mr Harkness put that, at the time that the festival had been cancelled, there were 100 unfulfilled contracts, in Grace Missions’ name, made by Mr Alexander and that this had tarnished Grace Missions’ name.

78. Both Mr McClure and Mr Harkness drew to Mr Alexander’s attention a typed letter Mr Alexander wrote to Mr McClure dated 5 February 2017. The letter was in substance, a letter of demand for the sum of nearly $190,000. The letter reiterated Mr Alexander’s belief that although the festival was Mr Alexander’s idea, it was Mr McClure who gave the festival and the NYE (event) the go ahead, and who offered and provided financial backing and Mr McClure who ultimately cancelled the festival. The letter made repeated threats about legal and action. Mr Harkness and Mr McClure also highlighted that the letter manifested Mr Alexander’s spiritual beliefs driving him.

79. In respect to this last point, Mr Alexander indicated, during the course of his re-examination, that the letter of 5 February 2017 was not the first time that he had conveyed his spiritual beliefs (or opinions as to how they may influence his conduct) to Mr McClure. He said that Mr McClure was aware of his affiliation with the ‘Andromedan High Council’ from 2014 through to March 2016.

80. Mr Harkness put that after the cancellation of the festival, Mr Alexander had been left with personal debts, of approximately $75,000, to Goddess Reawakening. Mr Alexander agreed with that.

81. Both Mr Harkness and Mr McClure put to Mr Alexander that it was because of his financial position, brought about by the cancellation of the festival, that he chose Mr Harkness, Mr McClure, SOCIA Church and Grace Missions as ‘soft targets’. That was denied.

Ms Hill’s evidence

Dealings prior to March 2016

82. Ms Christiane Hill is Mr Alexander’s partner. In her affidavit, she deposed to hosting several ‘SOCIA’ meetings at Drouin, in Victoria in late February and early March 2016. It emerged in the course of her cross-examination that there had been early meetings with Mr McClure and Mr Harkness, when Mr Alexander and she had resided at a different set of premises, back in August and October 2015. She agreed, after having been shown handwritten notes of them under cross-examination [1] , that Mr McClure’s handwritten file notes of these 2015 meetings covered a broad range of topics. Plainly Mr Alexander and Messrs McClure and Harkness had had close contact with Mr Alexander before the events the subject of this proceeding.

    1. The notes had not been annexed to any of Mr McClure’s or Mr Harkness’s affidavits. Mr Alexander complained that they should have been produced pursuant to his request prior to the trial, and not sprung upon Ms Hill ‘by ambush.’

83. One of those concerned a conveyancing transaction entered into by Mr Alexander in December 2014 at Warragul, in the state of Victoria. A dispute arose as to whether the SOCIA Church became responsible for payment of the balance of the purchase price (after Mr Alexander and Ms Hill had paid the deposit) and, if so, whether Mr Alexander had been authorised to render SOCIA Church liable in this way. I have indicated the limited use to which I ordered Mr McClure and Mr Harkness could rely upon this evidence.

84. Under cross-examination Mr McClure put the contents of two (4 page) handwritten notes of meetings between Mr Alexander, Mr McClure and Mr Harkness on 2 August 2015 and 7 October 2015. These notes were in Mr McClure’s handwriting. Neither Mr Alexander nor Ms Hill challenged their authenticity; although they did say that they had not seen the content of the notes (or at least carefully examined them) before affixing their signatures to the notes.

85. The former of these notes, contained a reference to Mr Alexander making a visit to ‘Vera’, for the purpose of trying to arrange the sale of a Picasso painting; as a potential source of money is for ventures such as the Festival designed in 2016.

86. The latter note carried a notation in close proximity to a note about a prospective festival, “$$ in the bank first”. Ms Hill was asked about this notation in connection with the discussion that had occurred concerning Mr Alexander’s desire for a festival. She said that she understood that money would need to be in SOCIA’s account. She was asked whether she recalled Mr Alexander requesting if Grace Missions could fund the festival. She answered no: she did not know of Grace Missions.

Meeting in March 2016

87. Ms Hill said, prior to the meeting in March 2016 that Mr Alexander had told her that he wanted to “talk about the festival”. She recalled that Mr Alexander had recently attended an event at the Exhibition Centre which could be used as a venue for his festival. He had a piece of paper and a flyer to that then you in hand to present to the meeting with Mr McClure and Mr Harkness. She recalled that there was nothing actually signed: as such she recalled Mr McClure ‘talking about honour and that he did not want to sign paper’. I note the resemblance between this recollection of what he said in March, and Mr Alexander’s recollection of what Mr McClure later said to a meeting of musicians on 3 January 2017.

88. She said in her primary affidavit that Mr Alexander had stated that with most costs, such as wages and fees, these could be offset until after opening night and the project could be set up for around $100,000. She deposed that Mr McClure proposed that this, and all creative and artistic projects, would be run through ‘Grace Missions’. This, she said in her affidavit, was the first time she had heard mention of that particular entity.

89. When she gave her evidence in chief, Ms Hill said that in March 2016 she recalled Mr Alexander bringing a proposal for a production of ‘Aida’. She recalled Mr McClure asking lots of questions and in saying that he (ie SOCIA Church) could put $100,000 into a trust fund through Grace Missions. In her affidavit, she deposed that Mr McClure had proposed setting up a bank account and email addresses in the name of Grace Missions with the money deposited into that bank account by 1 May 2016, with Mr Alexander having access to the account to pay invoices, as they fell due, for the New Year’s Eve event.

90. Under cross-examination, Ms Hill said that from the meeting on 7 October 2015 until the meeting in February or March 2016, Mr Alexander was busy creating a proposal for the festival. Asked whether this was tabled in writing, Ms Hill said that she could only recall seeing a budget in writing: this indicated an upfront cost of about $100,000. When she was challenged that Mr McClure made no such promise for funding the festival, Ms Hill said, in response: ‘I looked in your eyes and you promised that this time monies were there‘. She was adamant about this. She accepted that Mr McClure may have warned her to take certain steps and (although she did not agree with that) that Mr McClure had made a statement that Mr Alexander had done some “irrational things” she said it was possible that Mr McClure may have said that Mr Alexander was a ‘bull in a china shop’.

91. She also says that she heard the term “Creative Director” being used, with reference to Mr Alexander. On that topic, specifically, she recalls that it was Mr Alexander who identified the title for himself; that there were no objections raised by Mr Harkness or Mr McClure and she saw a handshake congratulating him on his appointment. Under cross-examination, Ms Hill acknowledged that it was Mr Alexander who used those words. She recalled the sequence of events: Mr Alexander suggested the title, there was ‘excitement’, and then a handshake.

92. She also said in her affidavit that Mr Alexander had said to Mr McClure, that in creating such projects for SOCIA, it would be his (Mr Alexander’s) head on the “chopping block” as he was contacting all of his industry contacts and his reputation would be at stake should the funds not be forthcoming, or the project had to be cancelled for lack of provision of the promised underwriting. She said in her affidavit that she was not convinced about this and asked Mr McClure to promise her personally that this money would be available. When she gave her evidence in chief she recalls saying to Mr McClure “Malcolm, you promise this then, money will be put into an account?” To which, she says, he replied “yes, I’ll promise”. She then recalls asking “who is this money coming from?”, to which Mr McClure responded “we have $100,000 just coming in from (she recalled) shares and can transfer that into the Grace Missions trust for Trevor (Alexander) to use”.

93. She said in her affidavit that she saw Mr McClure taking notes - either in a notebook or on his computer. She said that Mr Alexander and herself asked Mr McClure for a copy of the minutes of this meeting but did not receive them. She recalled that Mr Alexander was to be paid in a professional capacity. Profits were to go into the Grace Missions account so as to benefit the social community. She recalled Mr McClure saying that monies were to go into the Grace Missions account from investments.

94. It was put to Ms Hill that the March 2016 meeting was only a ‘catch up’. Ms Hill rejected this and cited that a laptop was brought and a notebook; although she could not specifically recall who (between Mr McClure and Mr Harkness) was using the laptop or taking handwritten notes.

Events after March 2016

95. Thereafter, she said in her affidavit she overheard telephone conversations between Mr Alexander and Mr McClure. She said that there were many such conversations, sometimes daily and sometimes weekly and the main topic of discussion was funds. On more than one occasion she said in her evidence in chief that she heard Mr McClure making statements to the effect “I haven’t got money at the moment. I will have the money from shares and will be able to cover (expenses) then.”

96. Ms Hill gave affidavit evidence that when 1 May 2016 arrived, a Grace Missions account had still not been created. She overheard Mr Alexander ringing Mr McClure, seeking explanation and heard Mr McClure respond by telling Mr Alexander that they (Mr McClure or SOCIA) were getting a loan from the bank to cover everything and the bank kept shifting the goal posts. She says that Mr Alexander had reiterated to Mr McClure that the funds were not forthcoming, Mr McClure should just say so as he (Mr Alexander, would put everything ‘on the shelf’ as it was his reputation that was on the line. She was not cross-examined on this aspect of evidence.

97. Under cross-examination she was referred to her evidence about a bank account not being set up. Ms Hill answered that, to her knowledge, funds that had been earmarked to cover the festival had in fact been allocated into the purchase of a Cairns property between March and May 2016. She was not challenged by Mr McClure on this evidence. To the contrary, Mr McClure, when cross-examining Ms Hill, rather audaciously, then sought to do so on the premise that this had in fact occurred: it was suggested that even if an arrangement had been made as she had deposed to, back in March 2016, by 1 May she was aware that it was no longer in place.

382. Further, in Herbert Clayton & Jack Waller Ltd v Oliver [1930] AC 209, the House of Lords awarded damages to an actor for loss of publicity arising out of a breach of a contract, in which he was to appear in public in a leading comic role. The award was founded in the application of the rule in Hadley v Baxendale, above. Although Mr Alexander was not an actor, I consider that some analogy arises. A creative and artistic director/producer, like an actor, trades in a currency of public and popular acclaim within his or her industry. Where an underwriter breaches the promise of its commitment, that is apt to naturally damage the standing of the director/producer in the eyes of the musical, or theatrical industry: the director/producer will virtually inevitably be regarded as someone who cannot be relied upon when making attempts to obtain the services of the artists crew members and others involved in artistic and musical productions.

383. Mr Alexander gave evidence that Mr Togher (principal of the Partnership – the plaintiff in the proceeding) told him on 4 January 2017 that the events that had occurred were “not good” for Mr Alexander’s reputation. This was in a context in which Mr Togher was demanding that his artists get paid. Mr Alexander also referred to, although he did not adduce evidence of an article in an on-line publication associating Mr Alexander with opera singers losing money. Further, he mentioned that Mr Wilson, who gave evidence for Mr Alexander, had told him, in January 2017 that “They (the musicians) are not happy. It’s unlikely that they will work with you again”. Neither Mr Harkness nor Mr McClure cross-examined Mr Alexander, or Mr Wilson, on this evidence.

384. I accept this evidence and find that Mr Alexander has suffered a loss of reputation consequential from breach of contract by SOCIA Church and Grace Missions.

385. In terms of any quantum, there is no requirement that such damages be ‘modest’: Boncristiano v Lohmann [1998] 4 VR 82 at 94-5. It is plainly the case that awards of such kind are not reducible to precise mathematical calculation. Although the analogy is not, by any measure complete, when assessing the quantum of such claim, some guidance may be obtained when evaluating the general damages recoverable by claimants in defamation. One of those considerations was recently adverted to in Rush v Nationwide News Pty Ltd (No.7) [2019] FCA 496 where (at [670]) the trial judge cited approvingly the statement[15] that “the law should place a high value upon reputation and in particular upon the reputation of those whose work and life depend upon their honesty, integrity and judgement.”

     15. Made in Crampton v Nugawela (1996) 41 NSWLR 176 at 195.

386. I am also mindful that the festival, had it run, was no small undertaking. Some high profile artists were engaged to perform in very well-known venues in Melbourne during a period where most of the community were on holidays; in the height of summer. I consider that there is a fair correspondence, or sense of proportion, as between the rewards, to all concerned, if the show was successful, and the risks of reputational damage to participants if the festival failed because of the underwriter’s breach of its promise to underwrite.

387. In the circumstances, I consider that Mr Alexander is entitled to a sum for loss of reputation of $30,000.

Exemplary damages

394. In some of the correspondence before the court, Mr Alexander threatened to bring a claim for this head of damage against SOCIA Church and Grace Missions.

395. However, this particular claim for relief was not pleaded in his cross-claim (as amended). At any rate, damages of this kind are not available in actions for breach of contract: Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298.

SUMMMARY & ORDERS

396. For these reasons, and in summary, I answer the issues as follows:

1. I accept that monies were advanced, and were promised to be advanced to Mr Alexander, by Grace Missions pursuant to an agreement reached in March 2016 (and varied in May 2016), instead of a loan agreement being entered into on or about 31 July 2016;

2. I find that:

1. the parties to the contract were Mr Alexander, Mr McClure, Mr Harkness, the other committee member of Grace Missions and the other committee members of SOCIA Church as at March 2016,

2. there was legal capacity in the unincorporated not-for-profit associations of the SOCIA Church and Grace Missions, through their respective committee members, to enter into a contract with Mr Alexander in March 2016,

3. Mr McClure was authorised to bind SOCIA to an agreement with Mr Alexander;

4. Mr Harkness was authorised to bind Grace Missions to an agreement with Mr Alexander and to appoint Mr McClure to deal with Mr Alexander on Grace Missions’ behalf for the purpose of that dealing;

5. The essential terms of the agreement in March 2016 were:

1. SOCIA Church and Grace Missions agreed that they would underwrite the production and performance of a Gala Event on New Year’s Eve 2016 in Melbourne up to $100,000 (by a mechanism whereby SOCIA Church would deposit funds into a Grace Missions account);

2. After payment of the production expenses (estimated to be $100,000), and Mr Alexander’s reasonable professional fees, all profits from the production were to be deposited into the same account, for the joint benefit of Grace Missions and the SOCIA Church;

3. Mr Alexander was impliedly or inferentially authorised to describe himself as the creative and artistic director of SOCIA and otherwise contract with third parties on behalf of Grace Missions and/ or SOCIA, for the purposes of production and direction of the show.

6. In May 2016, the parties agreed to vary the arrangement so that Mr Alexander would produce a musical theatrical festival to run throughout January 2017.

3. There was no enforceable loan agreement entered into in or about July or August 2016 between Grace Missions and Mr Alexander

4. No res judicata issue or estoppel arises from the dismissal of the plaintiffs’ claims against the defendants in this proceeding so as to preclude Mr Alexander’s entitlements to claim a breach of the agreement against the committee members of Grace Missions and SOCIA Church, respectively.

5. The agreement in March 2016 (as varied in about May 2016) was breached when Grace Missions and SOCIA Church failed to pay all of the production expenses referable to work performed up to cancellation of the festival on or about 7 January 2017.

6. However, the promise to pay Mr Alexander’s professional fees was unenforceable as being incomplete.

7. The quantum of Mr Alexander’s damages claim contains the following components:

1. Production expenses incurred, which, after deduction of the payments that were made by Grace Missions ($49,973.03), is $50,026.97.

2. Damages for loss of reputation being $30,000.

397. I order that within 7 days the plaintiff supply to my Associate (copying in the cross-defendants) short minutes of order to give effect to these reasons. Those short minutes will make provision for the total judgment sum, for a principal component of $80,026.97, in addition to Mr Alexander’s claim for interest calculated on such principal sum, in respect to the Cross-Claim filed on 21 December 2017 and for the dismissal of the Second Cross-Claim filed on 13 April 2018. If there is any objection to the orders by the cross-defendants to Mr Alexander’s claim, they are to be notified to my Associate within a period of a further 3 days. Thereafter I will make orders to dispose of the proceeding in Chambers.

**********

Endnotes

Amendments

04 June 2019 - Paragraph 23 amended: addition of words 'although one of them was not read.'

Decision last updated: 04 June 2019