New South Wales Supreme Court CITATION : Sydney SuperDome v Consolidated Press [2000] NSWSC 843 revised - 28/08/2000 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 3598 of 2000 HEARING DATE(S) : 21 and 22 August 2000 JUDGMENT DATE : 23 August 2000 Sydney SuperDome Pty Limited (First Plaintiff) MUA Partner No. 1 (Second Plaintiff) MUA Partner No. 2 (Second Plaintiff) MUA Partner No. 3 (Third Plaintiff) PARTIES : MUA Partner No. 4 (Fourth Plaintiff) MUA Partner No. 5 (Fifth Plaintiff) MUA Partner No. 6 (Sixth Plaintiff) Consolidated Press Entertainment Pty Limited (First Defendant) PD Entertainment Corporation Pty Limited (Second Defendant) JUDGMENT OF : Windeyer J at 1 COUNSEL : Mr T E F Hughes, QC with him Mr D Robertson (Plaintiffs) Mr G A Palmer, QC with him Mr W Muddle (Defendants) SOLICITORS : Clayton Utz (Plaintiffs) Minter Ellison (Defendants) CATCHWORDS : INJUNCTION - application for interlocutory injunction on grounds of breach of implied negative covenant in contract - whether defendant promoter had breached contract by failing to offer plaintiff first and last refusal to book an act - whether act was a "Sydney metropolitan indoor area suitable act" - whether the capacity of the plaintiff's venue could be decreased to make it "suitable" under the contract - acceptance by defendant there was a serious question to be tried - balance of convenience - where there would be considerable damage to both the defendant promoter and the performer if injunction granted substantially greater than likely damage to plaintiff if not granted DECISION : See paragraph 15 1 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WINDEYER J Wednesday 23 August 2000 3598/00 SYDNEY SUPERDOME PTY LIMITED v CONSOLIDATED PRESS ENTERTAINMENT PTY LIMITED JUDGMENT 1 HIS HONOUR: Sydney SuperDome Pty Limited (SuperDome) conducts the SuperDome Arena at Homebush Bay for Millennium Agents Pty Limited, the nominee of the MUA partner plaintiffs. Millennium has rights to operate the venue until 2031. The plaintiffs have an interest in the venue operating successfully and to capacity after the Olympic Games finish. 2 The defendant companies are a partnership conducting the business of Dainty Consolidated Entertainment (DCE). Mr Paul Dainty is the major figure in that business. DCE acts as promoter of major shows and events in Australia. 3 An agreement which I will called the "ticketing agreement" was entered into between 29 October 1999 and 1 November 1999 between SuperDome as agent for Millennium, Ticketek and DCE. As between SuperDome and Ticketek there is a seven year exclusive ticketing agency agreement for the venue. As between SuperDome and DCE the agreement gives rights of first and last refusal to both, as to SuperDome to book certain acts promoted by DCE, and as to DCE to jointly promote certain events with SuperDome. 4 DCE is promoting a tour of Australia by an artist, Mr Barry White. It is intended that he perform concerts in Sydney on 23 and 25 November 2000. The Sydney Entertainment Centre at Darling Harbour has been booked by DCE for those concerts. The agreement was entered into on 17 August, after the present proceedings were threatened. 5 Clauses 16.1(a) and 16.2(a) of the ticketing agreement are as follows: 16.1 Millennium Partnership's rights of first and last refusal (a) The Millennium Partnership will have the right of first refusal to book all Sydney metropolitan indoor arena suitable acts (which terms shall be determined having regard to the genre of the act, the nature of the production of the act, and the staging and support of the act. Examples of acts which would not be suitable are K.D. Lang and Carlos Santana. An example of an act which would be suitable is Alanis Morrisette) promoted by DCE and capable of performing in the Venue and the parties must negotiate bona fide in good faith concerning the terms and conditions of this booking. If the parties have not reached an agreement within 2 Working Days of the Millennium Partnership being provided with an offer from DCE (unless DCE is required to respond to a third party in a shorter period of time in which case the Millennium Partnership will comply with the time period advised by DCE), DCE will be free to negotiate with any third party. 16.2 Specific request from an act (a) If an act to which 16.1(a) applies (or its duly authorised representatives, makes a direct and specific request for another venue, DCE shall have the right, (which right will be exercised reasonably) to exclude such act from the provision of clause 16.1." It is accepted that no specific request has been made which would bring 16.2(a) into operation. 6 By amended summons the plaintiff seeks declarations to the effect that the performance of Barry White is one falling within the compass of 16.1(a) and permanent injunctions restraining DCE from advertising the Sydney Entertainment Centre as the location for the performance and restraining the defendants from taking further steps in the promotion of Mr Barry White until they have complied with the clause. The plaintiffs also seek an interlocutory injunction restraining DCE from selling tickets for the performance and from advertising or preparing the performance without putting the rights of first and last refusal into effect. It is this interlocutory application which is the subject of this judgment. The show has been advertised with tickets being advertised as available from Ticketek from tomorrow. 7 DCE has made arrangements for the tour by Barry White through the William Morris Agency Inc. The negotiations have been conducted between Mr Dainty and Mr Pinos, the senior vice-president of William Morris. Mr Pinos and Mr Dainty have also dealt with Mr Shankman, the manager for Barry White. Barry White is a singer who performs with the "Love Unlimited Orchestra". His show is intended to be presented in the round. Both centres are suitable for this. The evidence shows that he was a popular singer in the 1970s who has made a comeback in popularity in recent years, having performed successfully in concerts in Europe in the 1990s in venues holding between 5000 and 10,000 people. 8 The SuperDome is a vast venue. It is capable of seating nearly 22,000 people but, with adjustments for an in-the-round performance, perhaps closer to 20,000 people. The Sydney Entertainment Centre can seat about 11,000 people in performance in-the-round. The evidence shows that a smaller venue is more suitable for Barry White and it also shows at least at the present that it is unlikely that more than 11,000 seats could be filled for any one performance. There is evidence as to the detrimental effect on performers and audience of a half filled stadium and of the smaller and closer audience being required for the romantic appeal of the ballad type songs of Mr White. DCE has no written contract with William Morris but it has paid a deposit of $340,000. Mr Dainty says DCE is bound. That cannot be decided at this stage but it is clear DCE is working on that basis as the sales of tickets are to commence tomorrow unless restrained. 9 There is some evidence that it will be possible to re-conform the SuperDome so that the seating would be reduced to about 11,000. This would be done by installing curtains which would remove the view of the upper rows of seating. There is evidence that shows it might be possible to have that curtain produced and positioned by November but no contract has been let and no approval has been obtained from the board of directors of SuperDome to enter into any contract for the curtaining and the evidence is such approval from the board would be required. On the evidence the last time this was discussed was at a meeting on 20 April 2000 when some drawings were produced but this does not appear to have gone forward. 10 The claim for an injunction is based upon breach of an implied negative stipulation contained in cl 16.1(a) of the ticketing contract, namely, an implied stipulation not to promote an act at another centre without giving SuperDome the right of first refusal. As it is a claim of that nature it would not be of great relevance on a final hearing to determine whether or not damages would be a sufficient remedy although, of course, there would still be some discretion in the court. 11 The plaintiff claims that the Barry White show is an act which is a "Sydney metropolitan indoor arena suitable act." There is no doubt that it is a Sydney metropolitan indoor arena act. There is also no doubt that it is promoted by DCE and there is no doubt that it is capable of performing in the arena in that it could be conducted in the SuperDome. The defendant accepts for the purpose of this application that there is a serious question to be tried on the issue, that is, the breach of the implied negative stipulation, and, therefore, the real decision before the court is as to the balance of convenience. It is, however, necessary to give some attention to the strength of the plaintiff's claim. As I have said there can be no doubt that the Barry White show or act is capable of being performed in the venue. One would, however, think, as a normal matter, that a suitable act was one which could be performed successfully in the venue rather than just an act which could be performed in the venue irrespective of the likelihood of success of that act in that venue. The words in parenthesis in the clause in question would tend to make that clear. It is perfectly clear not all acts which can be conducted in the arena fall within the requirements of that clause. On the facts as they are established at the present time, but certainly not on a final basis, it seems to be more likely than not that the act in question would not be a suitable act to be performed in the arena as it stands at present. That is not a question for final determination but a statement which goes to the strength of the plaintiff's case. On the evidence as it stands it is also clear that without the curtaining the SuperDome would not be a suitable place for the act in question. On the evidence as it stands it is at least doubtful whether the necessary curtaining would be in place by November. I think it clear the only serious question to be tried is whether or not the SuperDome would be a suitable venue if the seating capacity were scaled down to 11,000. That is the argument which Mr Hughes of Queen's Counsel in the long run pursued. 12 I turn to the balance of convenience. DCE has paid the deposit for Barry White; whatever the contractual position is I consider it can be taken as unlikely that amount could be recovered. It has paid for advertising and preparation for Melbourne and Sydney a sum of about $183,000. If Mr White does not perform they would lose that. It has paid a deposit for the Sydney Entertainment Centre, but only of $6000. The evidence is that Mr White is not willing to perform at the SuperDome. His agents have said they would not be willing to let him perform there with reduced capacity through curtaining unless this had been tried and found to be successful for both sound, intimacy and other effects. The height of the dome, for a start, cannot be altered. They would not be prepared to let Mr White be the pilot to establish suitability through reduction in size. Accordingly, Mr Palmer, QC, submits there would be no utility in an injunction. Of course, as Mr Hughes has put, if DCE were restrained as sought one would expect further consideration would be given to his present intention and the present intention of the agents. There is evidence that the reputation of DCE would be affected if the tour were cancelled because it has been advertised and cancellations have adverse effects on the reputation of promoters. There is also evidence that unsuccessful acts and unsuccessful venues have adverse effects on performers. As against this the damage to the SuperDome plaintiffs if an injunction is not granted is that they will lose the right to, in the words of their counsel, pitch for the act, accepting, of course, that DCE would negotiate in good faith as it would be required to do under the contract. So that the loss to the plaintiffs would be the loss of the right of first refusal and loss of a chance to obtain the act and profit from the booking and the indirect loss which would flow by not being seen to run a successful venue attracting first class acts. That potential loss is on any basis considerably less than the likely loss to the defendants if an injunction goes. 13 Having regard to what I consider to be the relative weakness of the plaintiff's claim, the real uncertainty about the re-configuration (upon which any claim under the clause must be based) taking place, and the balance of convenience taking into account the potential losses through granting or not granting an injunction I conclude that the claim for interlocutory relief should be dismissed. 14 I think in the circumstances that the plaintiff should pay the defendants' costs of the interlocutory proceedings. An application has been made that the defendants keep accounts. I do not think an order should be made about that. In view of the size of the operation which they conduct one cannot think they would not be keeping proper accounts for each show. 15 The orders are: 1. The claim in par 1 of the amended summons be dismissed with costs. 2. The exhibits on the interlocutory hearing can be returned and retained for any further hearing. 3. I direct the matter be placed in the expedition list on 25 August 2000. Last Modified: 09/27/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.