Hearing: 22 - 26 August 2016

Appearances:

D W Grove for the Plaintiff
First Defendant in person and for the Second Defendant

Judgment:

10 November 2016

JUDGMENT OF THOMAS J

This judgment was delivered by me on 10 November 2016 at 11am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Solicitors:
Media Arts Lawyers, Auckland.

Counsel:
D Grove, O’Connell Chambers, Auckland.

BAXTER v COLEMAN [2016] NZHC 2693 [10 November 2016]

Introduction

[1] The plaintiff, David Baxter, is a musician who performs under the name Avalanche City. The first defendant, Matthew Coleman, a music manager and agent, was recommended to him. Mr Coleman, or his company Let the People Speak Entertainment Limited (LTPS), the second defendant, commenced acting for Mr Baxter around October 2010. Although Mr Coleman sent a draft management agreement to Mr Baxter almost a year later, it remained unsigned.

[2] In March 2013, Mr Baxter purported to terminate the relationship due to concerns over financial accounting. In particular, there were concerns as to income being earned but not disclosed, grants not reported, and failures to account properly for income due.

[3] Mr Baxter now claims that there were breaches of fiduciary duty and breaches of contract by Mr Coleman. He seeks $323,212.80.

[4] Mr Coleman says that any fiduciary duties were owed by LTPS, and that any corresponding contract was also with LTPS. He says he was employed by LTPS and never provided any services directly to the plaintiff. He also advances affirmative defences and claims for set-off, based on the money he says is owing to him by way of post termination commission.

[5] The major issues for determination of the claim include, factually, the identity of the parties to the management contract, the ownership of the master rights to Mr Baxter’s musical works, the status of a draft management agreement (the draft agreement) sent to Mr Baxter in 2011 but never signed, and legally, whether Mr Baxter was owed fiduciary duties and whether they were breached. The counterclaims raise another range of primarily legal issues.

Factual Background

[6] Mr Baxter’s first album, "Our New Life Above The Ground", was offered as

a free download from Avalanche City's official website. It was positively received.

Mr Coleman was recommended to Mr Baxter as a music manager, and Mr Baxter subsequently approached him through a contact to arrange a meeting to discuss obtaining music management services.

[7] Mr Coleman is the sole director and shareholder of LTPS, which was established 8 years ago. He has an extensive background in the music industry, having worked as a sales representative for CBS/Sony Music in Sydney for three years from 1989 and then moving to Warner Music, where he stayed for ten years.

[8] LTPS is a record label/booking agent and is also involved with…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Baxter v Coleman

Details

AGLC: Baxter v Coleman [2016] NZHC 2693
Case: [2016] NZHC 2693
Decision Date: 10 November 2016

CaseChat Overview and Summary

David Baxter, a musician performing under the name Avalanche City, engaged Matthew Coleman, a music manager and agent, to manage his music career. Coleman, or his company Let the People Speak Entertainment Limited (LTPS), began acting for Baxter around October 2010. Although Coleman sent a draft management agreement to Baxter almost a year later, it remained unsigned. Baxter terminated the relationship in March 2013 due to concerns over financial accounting. Baxter now claims that Coleman breached fiduciary duties and contracts by Coleman. Coleman argues that any fiduciary duties were owed by LTPS and that any corresponding contract was also with LTPS. Coleman also advances affirmative defences and claims for set-off based on the money he says is owing to him by way of post-termination commission. The key legal issues include the identity of the parties to the management contract, the ownership of the master rights to Baxter’s musical works, the status of the draft management agreement, and whether Baxter was owed fiduciary duties and whether they were breached. The counterclaims raise another range of primarily legal issues. Thomas J assessed the credibility of the parties, their evidence, and other established facts to determine the factual issues. The court concluded that a contract was formed at the meeting between Baxter and Coleman on October 15, 2010, and the parties to the contract were Baxter and Coleman. The court rejected Coleman’s assertion that the agreement was for a minimum term and that the topic of post-termination commission was mentioned at the meeting when the contract was formed. The draft agreement sent to Baxter in 2011 but never signed did not apply to their relationship. Baxter never agreed to transfer the ownership of his music in New Zealand to Coleman or LTPS. Baxter had cause to terminate the contract due to Coleman’s failure to account to him for income and consideration received during the term of the contract. The court found that Coleman breached the fiduciary duties he owed to Baxter and that Coleman failed properly to account to Baxter for income and consideration received by him during the term of the contract. As a result, Baxter has suffered loss. The court rejected the affirmative defences and dismissed the counterclaims for breach of contract and for damages on a quantum meruit basis. The court awarded Baxter $307,287.27, with interest from the date of commencement of these proceedings. Costs are awarded to the plaintiff.

Orders