UMA wins lawsuit against Modular’s Stephen Pavlovic

Earlier this month Universal Music Australia and Modular Recordings co-owner Stephen Pavlovic were heard at a Supreme Court proceeding in Sydney regarding the termination of Pavlovic's employment late last year.

Today, Justice Sackar ruled in favour of UMA, finding Pavlovic was bound by the terms of the 2014 settlement agreement with the major label.

In December last year Pavlovic decided not to sign the final of four settlement deeds sent from UMA. The deed followed months of negotiations over his employment and the then co-owned sub-licensed label Modular (which signed Tame Impala andThe Presets).

The Court found that the agreement reached via emails between UMA solicitors and Pavlovic’s solicitor on Christmas Eve were binding. This is despite Pavlovic’s alternative claim that the agreement as part of his separation from Modular Recordings had been terminated.

At one point during the court proceeding on June 4Justice Sackar said:"Your client was a thorn in Universal's side."

It has also now been made clear that Pavlovic has no shares in Modular Recordings, the company he formed in 1998 as a joint venture with the now UMA-owned EMI Music. One point brought up by Pavlovic’s solicitor during the submission earlier this month was that part of the settlement deed (contract) required UMA to pay $100 to Pavlovic and his sister – a token amount to execute the terms of the contract.

According to the judgment filed today, the $100 was “in consideration of the transfer of their beneficial and legal interests respectively in the shares in Modular Recordings to [UMA].” This occurred on March 6, but Pavlovic claimed that because it wasn’t paid on time (December 24 "or within a reasonable time thereafter"), it breached the contract. Justice Sacklar has found that because a time of payment wasn’t specified, the transfer of shares for Modular by Pavlovic to UMA was delivered.

“We are very pleased by the Court ruling and look forward to continuing to work with Modular and its artists under the Universal Music Group umbrella,” said George Ash, President, Universal Music Asia Pacific. “The Court’s ruling is in the best interests of artists and supports the label’s leadership transition and ongoing success.”

Tame Impala will release third albumCurrentsvia UMA on July 17.

The case will return to Court “in the next few weeks” for the finalisation of orders and costs.

UMA’s suit against Pavlovic came to light in the days following BMG’s case against Pavlovic. The case, filed in New York by the global music rights management company, stated BMG was suing over withheld US royalties of up to US$450,000 (approx AU$590,000), and for ignoring a cease and desist letter which requested the defendants stop selling Tame Impala’s back catalogue.

Pavlovic, Modular Recordings and UMA were named among the 14 defendants named in the suit, which also included Universal Music Group and Universal Group. Today, UMA had said it has filed court documents to dismiss the case against it and Modular.