American hip-hop and rap artist Flo Rida (also known as Tramar Dillard) failed to attend the Fat As Butter music festival in Newcastle in October 2011 (having slept in). He then failed to appear in the New South Wales District Court for the hearing and judgment in a breach of contract case filed against him and his Australian agent by the promoter as a result of the no-show. The judgment illustrates the availability of damages for future loss, in appropriate cases.

On August 3 2012 District Court Judge Gibson found Flo Rida and his Australian agent, Darren Ayre, liable to pay festival organisers more than A$400,000 in damages and legal costs for the no-show.(1)

Flo Rida had already received much attention for his failure to make any appearances in the case, which led to the court granting the promoters leave to file the proceedings on him via social media site Facebook, of which Flo Rida was an avid user.

In addition to an order requiring Flo Rida to repay the A$55,000 performance fee that he had accepted for agreeing to perform the one-hour set, Flo Rida and his agent were also ordered to pay damages arising out of Flo Rida's breach of contract and the consequential damage caused to the promoters' reputation, which ultimately resulted in loss of revenue (from poor ticket sales and lost sponsorship for the 2012 event).

The promoters claimed that their immediate damages, as a result of Flo Rida having not attended the concert, was the loss of 10,000 patron hours (in lost food and beverage sales) resulting from 2,000 people having left the venue in disappointment at the no-show.

In addition to the immediate losses experienced by the promoter on the day, the no-show by Flo Rida was held by the court to have damaged the trading reputation of the promoter, affecting its ability to stage future events, attract patrons and compete with others in the music event industry. In addition, sponsors were lost as news of the no-show spread via social media, including Facebook, Twitter and YouTube.

Australian and English courts have long recognised the 'in principle' right to be awarded damages for loss of reputation caused by a breach of contract. However, the case offers an interesting look at the circumstances under which unrealised damages may be awarded by a court in New South Wales for future losses that are anticipated to be incurred as a result of damage to reputation arising from breach of contract.

In the present case, the loss of reputation and damage to the trading reputation of the promoters of the 2011 Fat As Butter festival arose as a result of the impact of a no-show by the main attraction, Flo Rida, which impacted adversely upon the promoters' reputation for staging such events and procuring the attendance of prominent artists at the 2012 festival.

The judge held that it was immaterial that at the time of judgment the exact value of the loss could not be proved with precision. Furthermore, the evidence tendered in relation to the immediate effects of Flo Rida's no-show at the 2011 Fat As Butter festival not only demonstrated a significant impact on the promoters' profits from the 2011 concert year, but could also reasonably be anticipated to cause damage in relation to its proposed planning of the same annual concert in 2012.

The case is a salutary lesson to those who ignore their contractual obligations, as the loss for which they are ultimately liable may be much higher than they first thought.

For further information on this topic please contact Mitch Coidan at Piper Alderman by telephone (+61 2 9253 9999), fax (+61 2 9253 9900) or email (mcoidan@piperalderman.com.au).

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.

Endnotes

(1) Mothership Music Pty Ltd v Darren Ayre (trading as VIP Entertainment & Concepts Pty Ltd) (2) [2012] NSW DC 111.