Arthur v Delta Alpha Kappa Enterprises Pty Ltd and Ors [2021] NSWIRComm 1035

Industrial Relations Commission New South Wales Medium Neutral Citation: Arthur v Delta Alpha Kappa Enterprises Pty Ltd and Ors [2021] NSWIRComm 1035 Hearing dates: 21 April 2021 Date of orders: 21 April 2021 Decision date: 21 April 2021 Jurisdiction: Industrial Relations Commission Before: Commissioner Sloan Decision: Order that Delta Alpha Kappa Enterprises Pty Ltd make a payment to Gregg Frank Arthur in the amount of $1,530 within 21 days Catchwords: EMPLOYMENT AND INDUSTRIAL LAW – Application to resolve dispute under Entertainment Industry Act – whether performer entitled to payment for shows – whether entertainment industry hirer had a right to claim set-off for losses allegedly suffered Legislation Cited: Entertainment Industry Act (2013) s 20 Work Health and Safety Act 2011 (NSW) s 84 Cases Cited: Codelfa Construction Pty Limited v State Rail Authority of NSW (1982) 149 CLR 337 Category: Principal judgment Parties: Gregg Frank Arthur (Applicant) Delta Alpha Kappa Enterprises Pty Ltd (First Respondent) The Trustee for Delta Alpha Kappa Enterprises Trust t/as The Magician's Cabaret (Second Respondent) James Karpouzis (Third Respondent) Representation: P Yiallouros (Applicant) J Karpouzis (Respondents) File Number(s): 2020/250964 Publication restriction: No

EX TEMPORE decision 1. On 28 August 2020 the Media, Entertainment and Arts Alliance, on behalf of Mr Gregg Frank Arthur, filed an application pursuant to s 20 of the Entertainment Industry Act (2013) asking for the Commission's assistance in resolving a dispute which had arisen between Mr Arthur and three named respondents ("Application"). 2. The first respondent was Delta Alpha Kappa Enterprises Pty Limited, which was described in the Application as the legal entity under which the performance venue is incorporated. I digress to observe that in his oral evidence today Mr Karp, who appeared on behalf of that party, confirmed that this was the entity which had the contract with Mr Arthur. 3. The second respondent in the Application was described as "The Trustee for Delta Alpha Kappa Enterprises Trust T/A The Magician's Cabaret". The Application stated that this was the legal entity with which Mr Arthur had a common law contract to perform at the venue of the first respondent. Based on the evidence today I think that is wrong and I am not sure what, if any, orders could possibly be made against the second respondent. 4. The third respondent is Mr Karp himself who is given his legal name of James Karpouzis in the application but who, in the proceedings before me, stated that he prefers to go by the name of "Karp". Mr Karp was described as the Director and Secretary of Delta Alpha Kappa Enterprises Pty Limited, which was not in dispute. 5. The Application seeks payment to Mr Arthur of $1,850.20 for performances conducted at the first respondent's venue on 6 and 13 March 2020. 6. The proceedings were initially allocated to me and I attempted to conciliate the matter. I understood that following a conference on 23 September 2020 a settlement had been agreed between the parties. However, I was informed on 11 November 2020 that the settlement had not been able to be effected. Consequently I made directions and the matter came before me for hearing today. 7. Mr Arthur relied on an affidavit that he had sworn on 23 February 2021. In summary, Mr Arthur deposed in that affidavit: 1. In 2015 he was diagnosed with leukaemia. 2. He is the fulltime carer for his mother, a status recognised by Centrelink. 3. In early 2020 he negotiated with Mr Karp to perform at The Magician's Cabaret on 6, 13, 20 and 27 March 2020. 4. The contract between the parties was eventually reflected in written terms, a copy of which is annexure GA-5 to Mr Arthur's affidavit. I will refer to that document as "the Contract", which I note is undated. 5. Pursuant to the Contract, Mr Arthur performed at The Magician's Cabaret with "his trio" on 6 and 13 March 2020. 6. As a consequence of the growing threat of COVID-19 and recognising his immuno-compromised status, his responsibilities to his mother and on medical advice, he formed the view that he would need to cancel the shows on 20 and 27 March 2020. 7. He unsuccessfully attempted to contact Mr Karp between 16 and 20 March 2020, leaving messages that the show would need to be cancelled for safety reasons. 8. On 18 March 2020 Mr Arthur made a post on Facebook to let his "fans" know the shows on 20 and 27 March 2020 were cancelled for safety reasons. 9. At some stage between 20 March 2020 and 24 March 2020 Mr Arthur had a telephone conversation with Mr Karp in which he said words to the effect "Please send me the box office receipts so I can invoice you for the first two shows. I have paid the band as promised after each show". Mr Karp replied in words to the effect "I don't owe you anything. You didn't finish the performances". 10. Mr Arthur estimates that the money he is owed for the two shows that were performed is $1,850.20. 1. Mr Arthur also relied on an affidavit of Dr Samuel Thomas Milliken, sworn on 14 April 2021. Dr Milliken identified himself as a Specialist in Haematology at St Vincent's Hospital in Sydney and the Head of the Haematology Department at St Vincent's Hospital. He deposed that he has been Mr Arthur's treating haematologist since March 2015 when he diagnosed him as having chronic myeloid leukaemia in chronic phase. While Mr Arthur is doing very well on treatment and his leukaemia is in remission, Dr Milliken stated that "there is an issue with the COVID-19 pandemic as we know that patients with a pre-existing cancer diagnosis are five times more likely to develop severe COVID-19 illness if infected, with a similar increase in mortality risks". 2. Dr Milliken was of the opinion that it was not safe for Mr Arthur to attend a closed venue in March 2020 due to his underlying health issues. Had he been asked he would have advised Mr Arthur against performing in a closed venue on 20 or 27 March. 3. Dr Milliken further deposed that on the basis that Mr Arthur lives with and cares for his elderly mother, in his opinion it would put her at exceptionally high risk if Mr Arthur were to acquire COVID-19 due to his mother's propensity for developing severe and potentially life-threatening infection. 4. Dr Milliken was required for cross-examination and did not, in any substantial way, depart from his written testimony. 5. For his part Mr Karp, on behalf of the respondents, relied on an affidavit which had been sworn by him on 28 March 2021. In summary, that affidavit traversed the following matters. 1. A summary of the terms of the Contract. 2. That based on ticket sales for the shows on 6 and 13 March 2020, Mr Arthur would have been entitled under the Contract to $1,530 and not the $1,850.20 which had been claimed. 3. Mr Arthur was required to but did not invoice the first respondent to receive his portion of the house settlement. 4. On 17 March 2020 he received a text message from Mr Arthur stating "I am forced to cancel the shows". 5. On the same day he received an email from Mr Arthur which purported to notify patrons that the shows on 20 and 27 March 2020 had been cancelled but that "Gregg Arthur will return. A credit for future shows will be held in your name." 6. Mr Karp had not agreed to the cancellation of the shows on 20 and 27 March 2020. 7. At that stage Government restrictions had not been placed on the first respondent's business, other than for maintaining social distancing. Tickets were selling and Mr Karp's other shows continued to play in March 2020. Patrons were still contacting the business to book tickets. 8. The first respondent lost money due to Mr Arthur's alleged breach of contract. This included: 1. staff wages including the cost of a showgirl; 2. stock; 3. forgone bar and dinner sales; 4. forgone revenue from ticket sales; and 5. reputational damage. These were estimated to be $3,000 for the breach of contract and a further $3,000 as a consequence of Mr Arthur not returning at a later time to complete the contract. 1. Mr Arthur had been losing money on the season and that "Covid was just an excuse to bail out and not lose more money". 1. Section 20 of the Entertainment Industry Act gives the Commission a broad discretion to resolve disputes such as the present one. I note in particular that s 20(2) allows the Commission to conduct the dispute resolution process in such manner as the Commission considers appropriate and s 20(3) empowers the Commission to make such orders in relation to such a question, dispute or difficulty as the Commission considers fair and reasonable in the circumstances. 2. Several observations arise from the evidence that has been presented. If there is an amount outstanding to Mr Arthur under the Contract, it is $1,530 and not $1,850.20. In reality, the evidence presented by both parties as to how they came up with their respective figures was obscure in this respect, but Mr Arthur conceded in his oral evidence that he would accept the number which had been provided by Mr Karp. 3. Even to the extent that Mr Arthur can be said to have breached the Contract, it does not appear to contain a provision allowing the first respondent to withhold money that might be owed to him, in satisfaction of any loss or damages that might have been suffered by the first respondent. I note also in this regard that s 18 of the Entertainment Industry Act requires an entertainment industry hirer, who is required to make a payment to a performer, to do so within one calendar month or otherwise as agreed. (I note that that is a broad paraphrase of the provisions of s 18.) 4. Of course the question arises as to whether the entertainment industry hirer in this situation, that is Delta Alpha Kappa Enterprises Pty Limited, is required to make a payment but, for reasons which I will explain, that is a question for another time. 5. The losses that Mr Karp alleges were suffered by the first respondent were, with respect, put at such a high level and with an absence of detail that precludes an assessment as to whether the amounts claimed properly represent the actual losses, even assuming there was a breach of contract. 6. Mr Karp accepted under cross-examination that he had not expended money as a result of the cancellation of shows, but that rather the losses that he was claiming from Mr Arthur were in the nature of forgone income or other revenue opportunities that the first respondent would have benefited from, had the shows on 20 and 27 March gone ahead. 7. It was not in contest that Mr Arthur is immuno-compromised as a result of suffering from leukaemia. Whether or not Mr Karp was aware of that in March 2020 does not detract from the fact that it is accepted that Mr Arthur regrettably suffers from that condition and, as a result, he is more at risk from COVID-19 than the general population. It is also not in dispute that Mr Arthur is the carer for his elderly mother, who is also in a category which is more likely to suffer, as Dr Milliken said, more significant consequences from contracting COVID-19 than is the case with the general population. 8. The events of early 2020 were unprecedented. The COVID-19 pandemic was an ever-changing challenge for the entire community, business and otherwise. As Dr Milliken said, from the beginning of March community transmission was rapidly escalating. Given his particular circumstances, I consider that Mr Arthur had good reason for cancelling the shows on 20 and 27 March 2020. 9. I recognise the submissions that Mr Karp has made that Mr Arthur booked to perform a show at another venue in or about September or October 2020, which seems inconsistent with the concerns that Mr Arthur was expressing in March 2020. But Dr Milliken's evidence was clear that the community transmission in September and October 2020 was significantly different to that in March 2020. Indeed, the community's understanding of the virus and how to respond to it was that much more mature by September and October than it was in March 2020, at which time everyone, myself included, was simply struggling to keep up. 10. In this respect, I am not sure that Mr Karp or the respondents have properly recognised the unique circumstances of March 2020 or the even more unique circumstances in which Mr Arthur, given his health condition and family responsibilities, was facing. It has not been suggested and I certainly do not suggest that the first respondent was operating the venue in March 2020 otherwise than in strict accordance with Government guidelines. But in the particular circumstances confronting Mr Arthur and based on the evidence of Dr Milliken, it cannot be said that those steps were necessarily sufficient to protect Mr Arthur from the risk of the virus, and regrettably anecdotal evidence, which we could probably all draw from, would suggest that even in environments where all of the safety protocols required by the Government have been followed, there has been community transmission. 11. As to the suggestion from Mr Karp that Mr Arthur is using COVID as an excuse to avoid an otherwise unprofitable contract, I do not think that the evidence can make that out. An exchange of text messages between Mr Karp and Mr Arthur has Mr Arthur saying things such as: "I am forced to cancel the shows, I have been told to isolate and look after my mother. She has heart failure and is very immune compromised". And also: "Apparently things are getting worse with the spread not better, and mums [sic] doctors have given me no choice". And further: "James I'm not allowed to leave home, I'm in forced isolation for 2 weeks, so I can't talk tomorrow. Just call me and talk." 1. Those text messages were sent on or about 17 March 2020. 2. On any analysis, in all of the circumstances at that time, they could only have been referring to COVID-19, even if the virus was not then going by that name. I do not accept therefore the suggestion that the virus is now, in retrospect, being used improperly by Mr Arthur to avoid his obligations under the Contract. 3. In light of those observations and having noted s 20, I do not consider it necessary to address the submissions made on behalf of Mr Arthur that the contract was frustrated in the sense described in Codelfa Construction Pty Limited v State Rail Authority of NSW (1982) 149 CLR 337. I also do not consider it necessary to explore whether Mr Arthur was entitled to and in fact did invoke his rights under s 84 of the Work Health and Safety Act 2011 (NSW). 4. Another argument raised by Mr Karp was that, under the terms of the Contract, no payment was to be made until all four shows had been performed. There are two observations to say about that. Firstly, it does not appear in the Contract itself and secondly, there is no reference to any such obligation in any of the correspondence between Mr Karp and Mr Arthur that I have seen in these proceedings. 5. The Contract stipulated that "the show must go on" and clearly here it did not. I do not however consider that the Contract was necessarily breached but I wish to emphasise I am making no finding in that regard. I do not think it is necessary that I do so to determine these proceedings pursuant to s 20 and I say that in the knowledge that Mr Karp has referred to the potential for bringing a cross-claim against Mr Arthur for breach of contract. Were he to do so, he would need to demonstrate firstly, that there had been a relevant breach of the Contract and secondly, the amount of loss and damage that he believes flows from that and which is due to him by Mr Arthur. Both of those things have not properly been brought before me in these proceedings. In simple terms, if Mr Karp believes that there is a legitimate cross-claim against Mr Arthur, then he needs to be put to the proof of that in the appropriate jurisdiction. So for that reason I do not propose to make any findings that might be seen to suggest to any other court or tribunal how it should exercise its jurisdiction. As I say, I do not consider that I am required, in order to resolve this dispute, to do so. 6. In circumstances where a figure of $1,530 has largely been agreed, where there is no suggestion that Mr Arthur did not in fact perform on 6 and 13 March 2020, where there were unique circumstances that in his view precluded him from completing the contract and performing on 20 and 27 March 2020, and where the contract does not allow for the withholding of money due to the performer, I find for Mr Arthur on the Application and I order that Delta Alpha Kappa Enterprises Pty Ltd make a payment to him in the amount of $1,530 within 21 days. 7. For the sake of emphasis, that finding is made without prejudice to any legitimate claims that the first respondent may have against Mr Arthur arising out of breach of contract in another jurisdiction. Damian Sloan Commissioner