IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]           The Claimant EEM Evolution Entertainment and Marketing Limited is a company which, among other things, sets up and promotes concerts and shows which feature musical artists. It is operated by its two officers, Sylvan Carrier and Richard Murphy. The Defendant, Clydesdale Capital Entertainment Ltd., is a company that operates an entertainment booking agency and is also a management agency for musical artists. Its two main principals are J.T. Pangli and Valerie Schneider. These two companies have done business together on a number of occasions in which the Claimant has been in the role of concert promoter and the Defendant has supplied the talent for those concerts. The two companies enjoyed a good working relationship up until the matter which gives rise to this claim.

[2]           Tyga is the stage name of Michael Ray Nguyen-Stevenson, a well-known American rap artist from California. On February 14, 2013, the Claimant and Defendant entered into a contract in which the Defendant, ostensibly acting as agent for Tyga, agreed to supply the services of Tyga as the main entertainer for a show that the Claimant was organizing and promoting. The show was supposed to take place on April 20, 2013 at the Vogue Theatre in Vancouver. There was just one problem. The Defendant did not have the authority to act as agent for Tyga for that show. The Defendant was dealing with someone who purported to have the authority to book the artist for that concert date, but who did not in fact have authority to commit the artist for that show.

[3]           When Tyga (or whoever is responsible for the content of his Twitter account) learned that a show he was supposed to be headlining in Vancouver was being advertised, and which he had not authorized, word went out from his Twitter account that this was “another fake show”. By this time the Claimant had sold a number of tickets to the show and it eventually had to refund the ticket money to the buyers.

[4]           The contract signed between the Claimant and Defendant required the Claimant to pay a deposit of $21,611 due upon the signing of the contract and in any event no later than February 18, 2013. The Claimant says that it paid this money and that the Defendant has refunded $9,000 of this but not the rest. The Claimant seeks judgement for the sum of $12,611 (the remainder of its deposit), plus the costs it put out for the show, and lost income from the show. The total of these amounts exceeds $25,000 and the Claimant abandons its claim for any excess amount.

[5]           The Defendant says that it never received any deposit money from the Claimant. It admits to paying Mr. Carrier $9,000, but says that this was really a loan to Mr. Murphy. It doesn’t feel that it owes the Claimant anything.

[6]           The Claimant says that it paid the deposit money in cash, but was not given a receipt for the money. Normally, this type of evidence would not be credible and the Claimant would pay the price for being foolish enough to hand over a large amount of cash without getting any sort of receipt for the money. Two things make this case different. Firstly, the contract itself required that the total contract price is to be paid in “CASH ONLY” so this makes the Claimant’s version more credible. The Claimants say that this is not unusual in the industry, and the terms of the printed contract seem to confirm this. Secondly, there are a series of email from the Defendant which suggest that the Defendant actually did receive this deposit and was working to get the Claimant its money back.

[7]           For a number of years the Claimant and Defendant entered into a series of contracts in which the Defendant would supply a headliner for shows arranged by the Claimant. A series of these contracts were tendered in evidence. These contracts are for shows over a period from September of 2011 to September of 2013 and include artists such as Madclild, Snak the Ripper, Bizarre, Blake McGrath, LMFAO Party Rock Crew, Ghost, Xzibit, and Prevail. According to the evidence, all of these dealings between the parties were satisfactory. On each of these occasions, the parties signed a written contract which had the same format. The contract price was called “Wage” or “Wages” and in each case, in awkwardly worded language, the contract read as follows:

[8]           In the case of the contract entered into between the Claimant and Defendant for the Tyga show, in addition to the language quoted above, the contract provided the following:

[9]           Mr. Pangli testified that the contract tendered into evidence by the Claimants was missing a page. Indeed all of the other contracts that the parties appear to have made contained a similar page, sometimes initialled on behalf of the Claimant, and sometimes not. In this case the page was not initialled by anyone. The additional page contains a term which reads as follows:

[10]        Mr. Murphy and Mr. Carrier testified that both of them met with Mr. Pangli at the Defendant’s office on February 14, 2013 at 1:00 p.m. The contract was signed and the Defendant was given $21,000 in cash in Canadian funds. Both testified that the money was counted out on Mr. Pangli’s desk. This was the usual practice that the Claimant and Defendant had followed in the past. No receipt for the funds was provided because the Claimants considered the contract to be their receipt and because they trusted the Defendant.

[11]        On behalf of the Defendant, Mr. Pangli testified that a meeting was held in his office on February 14, 2013 at which time the contract with the Claimants was signed. However he denies that any money was received by the Defendant at that time or at any time subsequently.

[12]        On the same day that the contract was signed, the Claimants booked the Vogue Theatre in Vancouver for a show to be held on April 20^th. They paid a deposit of $3,164 and were given a receipt for this payment in the form of an invoice stamped “PAID”. Interestingly, the receipt is marked as being paid in cash.

[13]        On February 19, 2013, Mr. Pangli sent an email to the Claimant, setting out what the value of $21,000 USD was in Canadian funds. The email states that $21,000 in Canadian funds is worth $20,388.35 in US dollars. It asks the Claimant to “please pay the amount of $611.65. This amount must be paid before approval of poster is sent out and launch of the Tyga show.” It is curious that the Defendant does not say pay “$21,611.65” or otherwise suggest that the Defendant must receive the rest of the deposit before launch of the show.

[14]        There is no paper trail for the cash alleged to have been exchanged. Mr. Carrier testified that it comes from a number of different sources. Several friends of his contributed the money and there is no one place that would show any sort of transfer of $21,000. The Defendant has disclosed its bank records from its account at the Royal Bank of Canada for the period from November 5, 2012 to October 4, 2013 and no deposits in the range of $21,000 are shown in this period. There are some larger deposits in May and June in the $15,000 to $18,000 range and a $22,500 deposit in July. These deposits are described in the bank statement as branch to branch transfers, or online banking foreign exchange, but the bank statements are not more specific regarding their origin.

[15]        The bank statements were reviewed to determine if they would show deposits for some of the other contracts that the parties signed together during this period. Unfortunately, the bank statements entered into evidence only cover the period for two of the eight contracts between the parties which were tendered into evidence, those being the contract in dispute in this case, and another contract signed on July 3, 2013. In the case of the latter contract, the deposit was $500. The bank statements show a deposit to the Defendant’s Royal Bank account in this amount on July 5, 2013 by way of a branch to branch transfer. It is unclear if this relates to the same contract or not. In conclusion, it is difficult to discern from the bank statements what the Defendant’s past practice was when it received a deposit on a contract from the Claimant.

[16]        Whether or not a deposit was received by the Defendant, the parties acted as if one had been paid. Sometime toward the end of February of 2013, the Claimant submitted the artwork for its promotional materials to the Defendant who, in turn, passed it along for approval. On February 26, 2013, Ms. Schneider sent an email seeking approval for the artwork from the artist. On the same day, Mr. Pangli sent an email to Mr. Carrier forwarding what was purported to be the response from the artist’s management about the artwork.

[17]        In March of 2013, it became apparent that there were problems with the Vancouver concert. On March 12, 2013, a letter was received by the Defendant from Randy L. Freedman, an Attorney in Los Angeles. The reference line of the letter reads “Tyga/Unauthorized Performance Warning”. In the letter, Mr. Freedman wrote:

[18]        On March 14, 2014, Robert Gibbs from ICM Partners emailed Mr. Murphy and attached a copy of ICM’s letter of March 12 to the Defendant. Mr. Gibbs asked the Claimant to “please cease and desist of all advertising immediately.” He told Mr. Murphy that the Vogue Theatre had been similarly notified. Mr. Gibbs followed this email up with another addressed both to the Claimant and Defendant on March 20. It read as follows:

[19]        When the Defendant’s officer Valerie Schneider replied to Mr. Gibbs’ email later that day, she agreed to reduce the ticket price, but disputed Mr. Gibbs’ contention that she was not dealing with the artist. Interestingly, in the email Ms. Schneider also admits to Mr. Gibbs that she has received the deposit that is the subject of this lawsuit. She responded as follows:

[20]        This email is troubling because in the email, the Defendant told Mr. Gibbs that it had in fact received and forwarded the deposit which it is now telling the court that it never received. The email is very specific. It talks about the deposit for “this” show, referring to the show at the Vogue Theatre in Vancouver. Either the Defendant was not being truthful with Mr. Gibbs in the email, or it is not being truthful to this court.

[21]        Later on the afternoon of March 20, 2013, Mr. Gibbs sent another email to the Defendant and pointed out that the email address shown in the email which the Defendant had forwarded, purporting to be from Tyga, was not his correct email address. Mr. Gibbs wrote: “you are being scammed therefore again we ask that you please pull down your advertising at this point.”

[22]        By this time, the Claimant became concerned about whether or not the show would be taking place. Copies of the email between the Defendant and ICM had been copied to the Claimant. News had broken, allegedly originating with the artist via his Twitter account, that the Tyga show being advertised in Vancouver, and another one in Toronto were “fake shows.” On March 27, 2013, Ms. Schneider sent an email to the address she had for Tyga and his supposed manager asking why they were saying that these shows were “fake”. In the email she points out to the recipient that they have received the money for “these two shows” and adds that she has “a very disturbed promoter.” Once again, it is suspicious that Ms. Schneider would represent that money for the Vancouver show had been sent, when the Defendant is now disputing that it was ever received.

[23]        The Claimant was indeed very upset. Later on March 27, the Claimant emailed the Defendant the following message:

[24]        The Defendant replied, displaying offence at the suggestion that it was making up “fake emails” and “fake wire transfers”, something which the Claimant had never suggested. The suggestion of a transfer infers that the Defendant had in fact transferred money for this concert. The Claimant replied in a later email that “we haven’t see the confirmation from the bank that [the deposit on the contract was] transferred.” The Defendant replied that it was very disappointed and provided the Claimant with a routing number for the transfer. In this reply, the Defendant also attached an email from someone named Jermaine Preyen, suggesting that that the news about the Vancouver show being a “fake” show had originated from ICM Partners and not from the artist.

[25]        The Defendant offered an explanation as to why the show did not proceed. According to a company known as HipHop Canada, who was also promoting the Vancouver show, the mix-up arose because the artist was bound to the management company ICM by virtue of a contract that had been signed previously. The Vancouver show had been booked by a subsequent management company which apparently did not have the authority to do so. ICM did not approve the Vancouver show, leaving the problems which are the subject of this lawsuit in its wake.

[26]        On March 28, 2013, Mr. Pangli forwarded the Claimant an email from a company called Young Money. This is the company that the deposit for the Vancouver show was sent, according to the previous email from Ms. Schneider. The email from Young Money promises the Defendant that “you will get a deposit back and a % as well”. They offer the option of rescheduling the show and this message was passed along to the Claimant. On April 9, 2013, Mr. Murphy emailed the Defendant and said “I don’t want to reschedule. I want a refund, and will possibly look at rescheduling in the future.” Forty minutes later, Ms. Schneider responds in an email saying “Richard, they are giving deposit back and getting a reschedule date.” Once again, it is curious that Ms. Schneider would discuss the return of a deposit with Mr. Murphy, when the Defendant is now claiming that no deposit was ever paid by the Claimant.

[27]        The Deposit had still not been received by April 29, 2013. Ms. Schneider forwarded an email stating that the refund of the deposits was delayed because the accountant was “overseas.”

[28]        On July 15, 2013, the Defendant paid the sum of $9000 in Canadian funds to Mr. Carrier. Payment was made in the form of a Royal Bank of Canada bank draft. The Claimant says that this was a partial return of the $21,000 deposit it had given to the Defendant for the proposed Tyga show. The Defendant says it was for a completely separate matter, a private loan it was making to Mr. Murphy. Mr. Murphy testified that this is completely false.

[29]        In support of its assertion about the loan, the Defendant has produced an email it received from Mr. Murphy ten months earlier, on September 18, 2012, in which Mr. Murphy states as follows:

[30]        Mr. Pangli has produced a document which purports to be a loan agreement between Mr. Pangli as lender and Mr. Murphy as borrower. The terms of this loan do not resemble what Mr. Murphy had asked for in his email. In this document, the loan amount is $9000 at an interest rate of 16% payable at the end of a term of two years. The agreement is not witnessed. There is a signature that Mr. Pangli says is that of Mr. Murphy. Mr. Murphy denies that it is his signature. In comparing the signature on the loan document to that of Mr. Murphy on the contract and on other contracts, the two signatures are similar, but not identical. Looking at several signatures from Mr. Murphy on various documents, he is not always consistent in the way he signs his name. Sometimes it is done with more flourish than other times. It is possible that this is Mr. Murphy’s signature on the alleged loan document, and it is possible that it is not.

[31]        Mr. Pangli testified that the Defendant did not ask for a deposit from the Claimants for the Vancouver show because in its opinion, the deposit it had from the promoter of the Toronto show was sufficient to cover both the Toronto and Vancouver shows. The contract with the promoter of the Toronto show also required a $21,000 US deposit. However it is Mr. Pangli’s evidence that the Toronto promoter actually paid a deposit of $35,000. For some reason, the Toronto promoter paid was the full contract price instead of just the $21,000 deposit. Mr. Pangli gave the following answers in response to his lawyer’s questions:

[32]        Mr. Pangli claims that there was no request made from the artist for the deposit for the Vancouver show. This seems inconsistent with the email sent by Ms. Schneider. It is difficult to understand why, given that the two shows were being promoted by different promoters, one promoter would pay what would be the deposit for both shows. How was it fair to the Toronto promoter to have him, in effect, paying the deposit for another promoter’s show? This is questionable business practice, to say the least, especially since Mr. Pangli testified about this, saying “we never told him otherwise.” It is also difficult to understand why, if the artist was owed $42,000 for two shows (each requiring a deposit of $21,000) it would make no protect about only receiving $35.000.

[33]        Mr. Pangli testified that the $9000 paid to Mr. Carrier was a loan to Mr. Murphy, but that it was made payable to Mr. Carrier because, when the loan agreement was signed, he didn’t have the money readily available (or, to use his words, he did not have the money “on him”.) He testified that he told Mr. Murphy that he would give him the money the following week. On the day the loan was disbursed, Mr. Pangli claims that he had a conversation with Mr. Murphy and Mr. Murphy said that he was not in Chilliwack, so Mr. Pangli should give the money to Mr. Carrier. This does not explain why, when the “loan” was being disbursed in the form of a bank draft, it could not be made payable to Mr. Murphy. Mr. Carrier could still pick it up, without any need to have the bank draft payable to Mr. Carrier. On the other hand, making it payable to Mr. Carrier makes more sense if it was part of the deposit, because he would then be the one making refunds to his investors.

[34]        It is clear from the evidence that the Claimant and Defendant entered into a written contract on February 14, 2013 in which the Defendant was to provide the services of the artist Tyga to perform in a concert in Vancouver on April 20, 2013 promoted by the Claimant. It was a condition of this contract that the Defendant would provide the performance of the artist. By labelling this as a condition, this means that it was something that went to the root of the contract.

[35]        The failure on the part of the Defendant to perform this condition is what is known at law as a fundamental breach. A fundamental breach of contract occurs where “the event resulting from the failure by one party to perform a primary obligation has the effect of depriving the other party of substantially the whole benefit which it was the intention of the parties that he should obtain from the contract.” (This definition is taken from G. H. L. Fridman Q.C., The Law of Contract in Canada, Carswell, 2^nd Edition, at page 528).

[36]        The Defendant relies on a clause in the contract which begins by stating that it is agent for the artist. In this case however, it has been shown that this was in fact not the case. To the contrary, the evidence shows that the Defendant did not have the authority to act as agent for the artist. It misrepresented the true state of affairs in the contract by holding itself out as having the authority to contract on behalf of the artist, when in fact it never had such authority. The Defendant may not rely on this clause, when its underlying premise is false.

[37]        The clause is also unenforceable because the Defendant has committed a fundamental breach of the contract. It has essentially failed to provide it’s consideration for the contract and therefore it would be wrong to allow it to rely on the benefit of the contract. A fundamental breach of contract renders the contract void at the moment of the breach, and an exclusionary clause cannot affect any liabilities which arise as a consequence of the fundamental breach. This principle was confirmed by the Supreme Court of Canada in Beaufort Realties et al. v. Chomedey Aluminum, 1980 CanLII 47 (SCC), [1980] 2 SCR 718.

[38]        Lastly, this clause is unenforceable because it purports to take away the right of a party to access the courts in the event of a dispute. Such clauses are void because they offend public policy. No party to a contract can oust the jurisdiction of the courts, especially in the manner that this clause purports to do. (For an example of this principle, see Jack Bradley (Maritimes) Ltd. v. Modern Construction Ltd. (1966), 1966 CanLII 491 (NB CA), 59 D.L.R. (2d) 519 (N.B. C.A.))

[39]        The Defendant clearly failed to provide what it had promised under the contract. Under these circumstances, the Claimant is entitled to damages flowing from the breach. The general rule for measure of damages is that the aggrieved party is entitled to the amount of money which will put that party in the same position as it would have been in if it had not sustained the wrong. Damages are designed to compensate the injured, not to punish the wrongdoer.

[40]        In the present case in assessing the Claimant’s damages, it must firstly be determined whether the Claimant has proven, on a balance of probabilities, that the Claimant actually paid the deposit of $21,611.65, something which the Defendant disputes. As was stated earlier, it will be very rare for a claimant to establish this without either a receipt for the money, or a paper trail such as a cancelled cheque, bank draft or money order, showing payment of the funds.

[41]        In this case however, I am satisfied that the Claimant has proven, on a balance of probabilities, that the deposit was in fact received by the Defendant. I reach this conclusion for the following reasons:

[42]        All of these factors support the reasonable conclusion that the Claimants’ witnesses are being truthful when they testified that the Claimant paid the Defendant $21,611.65, but was only refunded $9,000.

[43]        In this case the measure of damages requires that the Claimant be returned to the position that it would have been if the Defendant had performed the contract satisfactorily. I accept the evidence of the Claimant, not contradicted by the Defendant, that if the Defendant had done as it promised in the contract, i.e. delivered the artist Tyga for a concert at the Vogue Theatre in Vancouver on April 20, 2013, the net proceeds from the show would have garnered them a return of their costs for which they were out of pocket (the balance of their deposit of $12,611.55, the costs of booking the theatre and of advertising: $6,214.20). In addition, after paying the balance of the contract price ($14.000), the resulting profit from ticket sales and other concert revenue would have covered all of these costs and generated at least another $6,175 in profit, likely far more than that. Accordingly, the Claimant has established that it has suffered damages in excess of $25,000. The Claimant has agreed to abandon its claim to any amount in excess of $25,000. Accordingly, it will have judgement for that amount along with its costs claimed in the sum of $236.

[44]        For the foregoing reasons, the Claimant shall have judgement against the Defendant for the sum of $25,000 plus costs in the amount of $236.