Novel

the Sydney Morning Herald.- Sydney

Literary agent Selwa Anthony has lost a high-profile lawsuit against bestselling Australian author Kate Morton, instead having to fork out more than $500,000 for the Shifting Fog writer.

Ms Anthony began NSW Supreme Court proceedings over an alleged breach of contract after Ms Morton suddenly sacked her in 2015 following a longstanding working relationship.

Ms Anthony claimed she and Ms Morton agreed during a telephone conversation in March 2002 that the agent would get a 15 per cent commission of all money earned by the author for the life of the works for which she negotiated the publishing agreement.

Morton, whose five bestsellers have earned her royalties of more than $17.3 million since she came onto the literary scene in 2005, counter-sued, accusing Ms Anthony of depriving her of opportunities as a fledgling author.

During the trial, Morton denied there had been a March 2002 telephone call in which Ms Anthony, a literary agent of 30 years' experience, laid out the terms of their relationship.

Instead, she said she understood over time that Ms Anthony would be paid 15 per cent of any advances she received from publishers.

I acquired it osmotically, I suppose," she said.

The court heard during the trial that Ms Anthony didn't "believe in contracts".

In her lengthy judgment, Justice Julie Ward echoed this, saying there was never any written agency agreement between the pair.

"Ms Anthony’s usual practice was not to enter into written agreements with the authors she represented," Justice Ward said.

The court heard there was a "course of dealing" between Morton and Ms Anthony from 2005 onwards in which Ms Anthony was entitled to deduct a 15 per cent commission from both advances and royalties.

But she found Ms Anthony wasn't entitled to commission after the end of the agency agreement, which had been validly terminated by email in December 2015.

"I do not accept that the evidence establishes on the balance of probabilities that there was ever a conversation between Ms Anthony and Ms Morton to that effect," Justice Ward said.

In her cross-claim, Morton claimed Ms Anthony failed to advise her of the financial implications of granting "world rights" under the publishing agreements entered into with publisher Allen & Unwin for the last four of her books.

She claimed she wasn't told how world rights deals operate or that she could instead have entered into direct agreements with foreign publishers, "territory by territory".

Justice Ward found Ms Anthony had been negligent in this aspect, ordering Ms Anthony to pay $514,000 – the amount Morton was said to have lost by way of additional commission on her fifth and sixth books – plus interest.

"It was clearly a material feature of the world rights arrangements that Ms Anthony’s duties as agent would be reduced to almost nil, whilst Ms Anthony continued to obtain the same rate of commission," Justice Ward said.

"I conclude that no disclosure of this aspect was made to Ms Morton, and that this was a breach of Ms Anthony’s duty to keep her principal informed. I would thus uphold Ms Morton’s cross-claim."

Justice Ward has called for submissions from both parties on costs.