Twelve Foot Ninja deal dispute survives jurisdiction challenge

A manager’s notice of motion regarding the NSW Industrial Relations Commission’s jurisdiction has been dismissed after it was determined that the definition of performer and entertainment industry hirer complies with that of the Entertainment Industry Act 2013 (EI Act).

In the 31 August decision, senior commissioner Nichola Constant noted that the actual dispute over the authority and exercise of a management agreement would be determined at a later date.

The parties in the dispute were Twelve Foot Ninja (TFN) band member Steven Malcolm MacKay and Volkanik Pty Lty and Macsta Music Management, with David MacGregor representing the management companies where he is director and managing director, respectively.

The dispute concerned the band’s management, specifically whether a deal made between the parties was a recording, publishing and merchandise agreement, or a representative agreement.

TFN first entered into an exclusive management agreement 2008, with the agreement and subsequent extensions or variations executed in 2013, 2017 and 2020 dictating the management of the artists’ professional affairs.

Further, a separate commercial relationship was established in April 2012 by way of a Short Form Exclusive Recording, Publishing and Merchandise Agreement between the band and Volkanik.

Under this agreement, Volkanik secured the rights to recordings, publishing, merchandise, sponsorship, endorsements, and royalty administration, as well as a commitment album during each album period.

The arrangements also served different functions, with the Macsta agreement covering live performances, communication with booking agents and touring matters, while Volkanik managed contractual rights.

While it is not disputed that the Macsta agreement concluded around October 2022, MacKay contended that this expiration did not affect the nature of functions thereby performed by Volkanik.

From this time, however, a number of disagreements emerged between the parties over the extent of Volkanik’s role in performance-related activities, whether Volkanik could be defined as an entertainment industry hirer or performer representatives, the operation of royalty accounting and set-off arrangements, and the ongoing operation of the Volkanik agreement.

After first commencing proceedings in the local court, MacKay applied to the NSW Industrial Relations Commission for determination.

In opposition, however, MacGregor filed a notice of motion, contending that Volkanik is not an entertainment industry representative or hirer within the meaning of the El Act, and that the commission therefore did not have jurisdiction to determine an outcome.

According to Constant, the determination of whether the statutory conditions for the exercise of jurisdiction under section 20 of the EI Act requires consideration of whether MacKay is a performer under the act, whether Volkanic qualifies for the definition of an entertainment industry hirer or entertainment industry representative in ss 4 and 5, and whether the dispute in the application arises for the purposes of s 20.

Section 3, 4, 5, 6, 20 and 39 of the act were highlighted as the relevant provisions as they outlined the objects of the act as providing “effective, fair and consistent regulation of the entertainment industry” and “to provide protections for performers”, defined terms such as entertainment industry agreement, hirer and performer, detailed the management of trust accounts established by performer representatives and outlined the conditions for a void contract, respectively.

Volkanik submitted that it acted as a rights owner and principal rather than an agent or rights owner, and in this way, that the agreement was designed as recording, publishing and merchandising function rather than a representative one.

However, MacKay claimed that the contractual labels were not relevant to the decision of jurisdiction because the determination applied to the agreements’ statutory definitions and party conduct.

Constant accepted the latter’s claim, further asserting that MacKay’s participation in a band does not disqualify him from the definition under the EI Act.

Regarding the primary consideration of Volkanik’s operation and scope, Mackay claimed that the company contracted the band for commercial and financial benefit, while the respondent submitted that the concept of an entertainment industry hirer should be confined to discrete engagements for an identifiable performance, further asserting that the EI legislation applies to conventional performance engagements rather than recording and royalty arrangements.

Constant said: “I do not accept that submission or that the statutory language permits such a limitation. The definition of ‘entertainment industry hirer’ in s 4 is expressed in broad terms and contains no requirement that the engagement relate to a single performance, a short-term engagement or a conventional booking arrangement.”

Further, she said that ss 18 and 19 “regulate aspects of a relationship that already answers the statutory description of entertainment industry hirer. They do not define the scope of that relationship and cannot be used to narrow the language adopted by Parliament.”

This understanding similarly applied to the definition of a performance, with the EI including recorded performances where “one purpose is the financial benefit of the performer, hirer, or both”.

The exclusive recording right and rights to future creation and delivery of recorded performances, Constant said, meant the Volkanik agreement fell within the EL Act definition of a “performance”.

Further, while Constant accepted that the Volkanik agreement couldn’t be characterised as a conventional performer engagement, it was reinforced that the issue was whether MacKay was contracted for the purpose of a performance as defined by the EI agreement, which Constant claimed it did.

Constant, therefore, concluded that Volkanik is an entertainment industry hirer as it contracted MacKay for the purpose of recorded performances.

Following the commission’s dismissal of the notice of motion, a hearing was set for 15 September to determine the actual dispute.

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