The plaintiff, Long Island Pty Ltd (Long Island) was an entertainment company and promoter that brought international artists to Australia for concerts. They entered a contract with Max Welter Operating Pty Ltd (Welter) to hire a venue in Sydney, owned by Welter. The contract was entered into and signed by both parties on 17 January 2017 and included terms about ticketing, staffing, event safety and closure (the Contract). The venue hire was for a performance by a Jamaican reggae and dancehall artist known as Beenie Man, who was doing a tour around Australia arranged by Long Island. The Sydney performance was to take place on 23 March 2017.

On 21 March Welter sent Long Island an email noting their concerns about poor ticket sales, the late appearance of the performer on stage, and safety issues for staff and patrons. They advised that Long Island had not satisfied the Contract. Welter then cancelled the venue hire for the Sydney performance. Welter later said that Long Island had also breached the law, as it had been involved in fraudulent ticket sales.

Long Island found another venue for the Sydney performance. They later sued Welter in the Sydney Civil and Administrative Tribunal for damages for breach of contract, due to the cancellation of the venue hire. Long Island is a corporation registered in Indonesia.

Clause 24 of the Contract between Long Island and Welter read as follows: Event Closure - MWO [Max Welter] may without any liability or penalty, at its sole discretion and without prior notice, close or suspend the event once started, for safety or security reasons or any other breach of applicable law or code which has occurred or is about the occur at the time of closure.

On a different note and during the trial, Welter brought as witnesses ten individuals claiming that they have been offered tickets for the Sydney concert by a third party, an individual called John, at half of the official purchase price of the tickets. Welter alleged that John was linked to Long Island and it was Long Island who attempted from the beginning to jeopardize the event and undermine the interests of Welter thereto.

In their support, Long Island stated that they have never been involved in any fraudulent ticket sales and, after the cancellation of the Contract by Welter, it costed them additional 100,000 Australian Dollars to be able to rent another venue for the Sydney concert. In order to reject such claims, Welter relied on a disclaimer in the contract stating that Welter assumes no liability for any loss suffered by Long Island, for any reason whatsoever.

At the end of the Court trial and prior to the Court issuing the verdict, the venue owned by Welter was severely flooded by rain, therefore was unusable for a very long time. We may assume it was destroyed.

[Adapted based onKingsbridge Holdings Pty Ltd v Max Watt's Operating Ptd Ltd (Civil Claims) [2018] VCAT 1674]

1.Can Welter claim that the contract had been frustrated in order to avoid paying any damages to Long Island?

2.During the trial, Long Island claimed damages for breach of contract on the part of Welter. Would the court award damages in such case? If yes, what type of damages?

3.Advise whether the new contract entered by Long Island for renting a new venue is a collateral contract to the contract entered into with Welter.