Insurer sued over bushfire-axed festival

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Insurer Lloyd's has been sued for around $870,000 after claiming a rural NSW music festival should not have been axed despite the Black Summer bushfires raging kilometres away.

The cancellation of the Subsonic festival in December 2019 was necessary because of the threat that the unprecedented fires caused, organiser Scott Commens claimed in a Federal Court lawsuit filed on Monday.

Subsonic had taken place from 2010 until 2019 at the Riverwood Downs camping grounds on the banks of the Karuah River, near the town of Monkerai in NSW's Hunter region.

According to court documents, around 5000 people were expected to attend from December 5 to 9, 2019.

Around 200 artists were booked for the event, including electronic musicians Ricardo Villalobos and Mathew Jonson, DJs Craig Richards and Margaret Dygas, and experimental band Bobby.

As the bushfires spread through the dry NSW landscape, including to locations less than 40 kilometres away from the festival, Mr Commens and the owners of Riverwood Downs decided to call off the event.

Not only could festival goers be cut off if the fires enveloped the roads in and out, but water levels in the drought-affected Karuah River were low and were insufficient to deal with any blazes, Mr Commens said.

Unable to find a suitable alternative location, the cancellation was "necessary" and a direct result of extreme weather conditions, he said.

In December 2019, Mr Commens made a claim for between $867,000 and $877,000 under his event cancellation and abandonment cover with Lloyd's.

Subsonic alleges it spent almost $1.1 million in organising the festival, but gained around $300,000 in income for the event before it was abandoned. Around $90,000 in net profit was also lost.

The insurer refused the claim in April 2020, saying the event could still have gone ahead, and that a written contract should have been in place between Mr Commens and the owners of Riverwood Downs.

"(Mr Commens) contends that, in refusing to pay the claim, the respondents breached the contract of insurance," he wrote in court documents.

He is seeking damages, interest and his legal costs.

According to Subsonic's Facebook page, Mr Commens went through Lloyd's internal dispute resolution processes as well as seeking assistance from the Australian Financial Complaints Authority before elevating the matter to the Federal Court.

Those who purchased tickets have been unable to receive a complete refund because the funds were spent on expenses before the event was due to kick off.

At the time, Mr Commens said he had no other option than to cancel the event.

"We would like to offer our sincere apologies to all our patrons, artists, stallholders, staff and volunteers that are affected by the postponement," he said in a statement.

"We were only advised of the unavailability of Riverwood Downs at very late notice and were unable to safely change the venue for next weekend."