the guy probably felt that there wasn't the need to pay TWICE for playing the music.
maybe he believed that hiring the dj, and with dj paying a fee already, that he wouldn't need to pay more fees. like, the dj already pays for professionally playing the songs in public places BUT the public place also has to pay a fucking fee and they could have probably gotten off with paying just that one.
however he was mistaken, due to fee systems typically being really, really fucked up. want to play your _own_ song on a street? free if you never signed up to receive royalties. if you did, you'll have to pay a fee - a fee that should be paid to _you_ mind you and which you get back just a fraction of(if anything, depending on how that particular organization counts who gets the money - is it pretty much exact racketeering by whoever owns MJ's playing rights? pretty much yeah, in practice in most organizations only the popular enough to register in their rigged measurement system get paid - while playing every band needs you to pay the organization, they're only paying bands their algorithm extrapolates plays for)
generally though, it's the venue who is responsible for paying the fee.