Anthony v Morton

1. [1]

   HER HONOUR: The present proceedings involve a dispute between an internationally best-selling Australian author (the defendant/cross-claimant, Ms Kate Morton) and her former literary agent (the plaintiff/cross-defendant, Ms Selwa Anthony).

2. [2]

   Broadly speaking, Ms Anthony claims that she is entitled to be paid 15% commission on all royalties earned from Ms Morton’s first six published books for the life of each work (by which, as I understand it, she means the period in which copyright subsists in the works or the works remain in publication), notwithstanding the termination in December 2015 of their agency relationship and notwithstanding the termination of the publishing agreements negotiated in respect of those works when she was Ms Morton’s agent. Ms Morton denies any such entitlement and has cross-claimed against Ms Anthony (and a company with which Ms Anthony is associated – see below at [13]), alleging breach of fiduciary duty, breach of contract and negligence in relation to Ms Anthony’s conduct in advising Ms Morton to grant world rights under the publishing agreements entered into for the last four of Ms Morton’s books and failing to advise Ms Morton as to the financial implications of such a course of action.

Summary

1. [3]

   At the time of the hearing, five of Ms Morton’s books had been published, to local and international acclaim, from the sale of which substantial sums (in the order of some $17 million) by way of royalty had been earned. In September 2018, after the hearing, Ms Morton’s sixth novel was published. It is not disputed that Ms Anthony, a literary agent who has represented and managed various Australian authors over a period of some 30 years, represented Ms Morton and acted as Ms Morton’s agent in relation to the publishing agreements for those six books and, until January 2016, in the collection of income payable to Ms Morton under those agreements.

2. [4]

   There was, therefore, clearly an agency relationship between the parties and Ms Morton does not dispute this. However, there was never any written agency agreement between them. Ms Anthony’s usual practice was not to enter into written agreements with the authors she represented.

3. [5]

   Ms Anthony contends that (in accordance with her usual practice) there was an oral agency agreement between her and Ms Morton. That oral agreement is pleaded (see [8] of the further amended statement of claim filed 7 September 2016) as having been entered into in or about March 2002. The time at which Ms Anthony says the oral agreement was entered into is of some significance, as I will explain in due course. The terms of that oral agreement are alleged, in the alternative, either to have been orally agreed (see [9]-[12] of the further amended statement of claim) or to be implied (alternatively, implied by custom and usage in the book publishing industry; or implied in fact; or implied by conduct) (see [13]-[15] of the further amended statement of claim).

4. [6]

   Ms Anthony also invokes the doctrine of conventional estoppel and alleges that Ms Morton is estopped from resiling from an assumption (the Royalties Assumption) to similar effect as the alleged oral agreement (see [175] below), on the basis of which it is claimed that both parties conducted their relationship from in or about March 2002 until in or about 10 December 2015 (see [27]-[34] of the further amended statement of claim).

5. [7]

   Ms Anthony seeks a variety of relief consequent upon Ms Morton’s alleged breach of the oral agency agreement (or her resiling from the conventional basis on which it is alleged they conducted their relationship) including damages referable to the loss of the 15% commission to which Ms Anthony claims she is entitled for the life of Ms Morton’s first six published books.

6. [8]

   Ms Morton denies liability. Ms Morton accepts that there was an agency agreement between the two but contends that the agency agreement was formed by reference to their course of dealings from 2005 and was, in effect, limited to payment of 15% commission on advances and royalties earned during the course of their agency relationship.

7. [9]

   As adverted to above, Ms Morton’s cross-claim arises out of Ms Anthony’s conduct in relation to the negotiation of world rights publishing agreements with Ms Morton’s first Australian publisher, Allen & Unwin Australia Pty Ltd (A&U), for Books 3 to 6. Ms Morton complains that Ms Anthony failed to advise her how world rights deals operate and failed to advise her that she could instead have entered into direct agreements with foreign publishers, territory by territory. The significance of the difference between granting A&U worldwide publishing rights rather than Ms Morton entering (through Ms Anthony as agent) into direct publishing agreements with overseas publishers on a territorial basis is, in essence, that significantly more commission is paid by the author under arrangements of the former kind than under the latter because there is at least one additional layer of commission payable out of the gross revenues earned from the sale of the books (in the present case this is referred to as, and Ms Morton claims, the “A&U share” of commission, which varied from around 20-25% for Books 3 to 4 to 10% for Books 5 to 6).

8. [10]

   For the reasons that follow, I have concluded that Ms Anthony’s claim should be dismissed and that Ms Morton’s cross-claim upheld in part – namely, as to her allegation of negligence in relation to the advice at least implicitly given by Ms Anthony (by presenting her with the publishing agreements containing those terms) for Ms Morton to enter into “world rights” deals for Books 5 to 6 without explaining adequately to Ms Morton (or at all) the alternative options available to her and the respective advantages and disadvantages of such a course. Although I consider that there was also negligence in relation to the entry into world rights publishing agreements for Books 3 and 4, I find that the claims in relation to Books 3 to 4 are statute barred and that the fraud exception to the otherwise applicable statutory limitation period does not arise. I am satisfied on the balance of probabilities that Ms Morton has suffered the loss claimed and accordingly I will make orders in that regard and I will make directions for submissions to be filed on the question of costs.

Background

1. [11]

   As noted earlier, Ms Anthony has been a literary agent for over 30 years.

2. [12]

   For part of the time in which she represented Ms Morton, Ms Anthony did so trading under a registered business name (Selwa Anthony Author Management Agency) of which she was then a registered proprietor (see for example Exhibit 8, CB 6/2098; 6/2101).

3. [13]

   On 24 August 2005, a company was incorporated (Selwa Anthony Pty Ltd, to which I will refer as SAPL), which became the holder of the registered business name and thereafter operated the agency under that name (and issued tax invoices and payment advices in relation to Ms Morton’s books in the company name) (see Ms Anthony’s affidavit of 22 December 2016 (Ms Anthony’s first affidavit) at [74]). Ms Anthony does not assert that there was any agency agreement between SAPL and Ms Morton (and the company is not a plaintiff in the proceedings; nor is it named as agent in the relevant publishing agreements). SAPL has, however, been joined to the cross-claim as a second cross-defendant in the event (which Ms Morton disputes) that it is found that there was ever an agency agreement with SAPL.

4. [14]

   One of the authors Ms Anthony has represented for some time is Ms Kim Wilkins, an academic and author who was for some years (but is no longer) a close friend of Ms Morton and who has signed a number of affidavits in these proceedings (an affidavit sworn 15 December 2016, an affidavit affirmed 27 September 2017 and an affidavit affirmed on an unspecified date in August 2018). It is not disputed that Ms Anthony and Ms Morton first met or became acquainted through Ms Wilkins.

5. [15]

   Ms Anthony initially seems to have placed her first meeting with Ms Morton as being in around 2002. In her first affidavit, Ms Anthony deposes (at [19]) to meeting Ms Morton briefly at an event Ms Anthony had organised and later to meeting Ms Morton when she visited Sydney with Ms Wilkins (to the best of her recollection that being in 2002). Although Ms Anthony in that first affidavit also notes that Ms Morton had said publicly that she, Ms Anthony, had been her agent since 1999 (see [19], in a sentence only read by me as a submission), Ms Anthony does not herself depose to any meeting as far back as 1999; nor does she contend that there was any agency relationship as far back as 1999.

6. [16]

   Ms Morton, in her affidavit affirmed 22 March 2017 (Ms Morton’s first affidavit), places her introduction to Ms Anthony as having occurred earlier than 2002. She has deposed that she attended one of Ms Anthony’s annual “Sassy” seminars in or about 2000 as Ms Wilkins’ guest and that she was introduced briefly to Ms Anthony by Ms Wilkins ([12]) but that they did not then discuss writing or publishing. (It may be that this is the “event” to which Ms Anthony refers at [19] of her first affidavit, in which case their accounts to this point are broadly consistent.)

7. [17]

   This was clarified in both Ms Anthony’s affidavit sworn 27 April 2017 (Ms Anthony’s second affidavit) (in reply to Ms Morton’s first affidavit), and in her affidavit sworn 28 September 2017 (Ms Anthony’s third affidavit) (also in reply to Ms Morton’s first affidavit). In those affidavits, Ms Anthony deposes that Ms Morton had attended her “annual day seminar and evening Sassy Awards” in November 2000 (see [2](9)-(26) of Ms Anthony’s second affidavit; [9] of her third affidavit). She deposes that on 31 January 2001 Ms Wilkins had introduced Ms Morton to an online authors’ forum set up in 1999 by Ms Wilkins for Ms Anthony’s science fiction, fantasy and horror writers (see [2](9)-(26); [7], [10]-[11] of the respective affidavits). Ms Anthony also there refers to Ms Morton’s attendance at the first Popular Reader’s and Writer’s Festival she (Ms Anthony) had organised on 7-8 July 2001 and to Ms Morton’s attendance at the seminar and awards evening again that year in November 2001 ([2](9)-(26); [13]-[14] of the respective affidavits).

8. [18]

   This last evidence is consistent with Ms Morton’s recollection (see [20] of her first affidavit) that in or around late November 2001 she attended a “Sassy” event with Ms Wilkins and stayed with Ms Wilkins at Ms Anthony’s house the following night. Consistently with Ms Morton’s evidence, Ms Wilkins (in her affidavit sworn 15 December 2016 at [5]) places her visit with Ms Morton to Ms Anthony’s home as having occurred in the summer of 2001/2002.

9. [19]

   Ms Anthony says that during Ms Morton’s visit (which, as noted, she places in 2002) she told Ms Morton that she was happy to look at anything Ms Morton had written (Ms Anthony’s first affidavit at [19]). (I note that, by then, Ms Morton’s evidence is that she had already sent two manuscripts to Ms Anthony: see below at [20]-[21].) Ms Anthony does not suggest that she informed Ms Morton during that visit of the terms on which she would be prepared to act as Ms Morton’s agent; and Ms Morton’s evidence is that, at the time when Ms Morton visited Ms Anthony’s home (which she says was in November 2001), she and Ms Anthony did not speak about the manuscript she had (by then) recently written and posted to Ms Anthony (see [21] below).

10. [20]

    At [9] of Ms Morton’s first affidavit, she deposes that in or about 2000, when an Honours student in English Literature, she wrote her first manuscript; that Ms Wilkins offered to send it to her literary agent (Ms Anthony) and did so; and (at [11]) that about six weeks later Ms Wilkins told her that Ms Anthony said that the manuscript was not publishable but that if she wrote another one Ms Anthony would look at it.

11. [21]

    Ms Morton has also deposed in her first affidavit (at [14]-[16]) that after attending the annual “Sassy” event in 2000 she started writing again and that in or around August 2001 she posted Ms Anthony a completed second manuscript, which was returned by Ms Anthony in late September 2001 with a rejection letter from a publisher at HarperCollins (see letter dated 28 September 2001 at p 2091 of Exhibit 8) and a note inviting Ms Morton to call Ms Anthony if she wished. Ms Anthony in her second and third affidavits appears to accept that this occurred (although she cavils with Ms Morton’s description of the HarperCollins letter as a “single rejection letter”, deposing that it was a very detailed reader’s report that she had requested for Ms Morton, and she also cavils at the implicit criticism that the manuscript had only been sent to HarperCollins – see [2](16)-(17); [18]-[19] of her respective affidavits).

12. [22]

    Ms Morton deposes that she had a telephone conversation with Ms Anthony in or about late September 2001 in which she says she asked Ms Anthony whether she thought she (Ms Morton) should work on the manuscript (i.e., the one that Harper Collins had rejected) and re-submit it and Ms Anthony said she could do so if she wished or otherwise write something else and send it to her (see at [18]). As events transpired, Ms Morton chose the latter course. She deposes that in this (September 2001) conversation there was no discussion of any “terms” of Ms Anthony’s engagement; nor had this previously been discussed (see [18]). (I note in this regard that up until Ms Anthony’s third affidavit the accounts of Ms Anthony and Ms Morton on this point seems to be consistent; but in Ms Anthony’s third affidavit (at [20]) there appears for the first time the assertion, in general terms, that there was a “series of conversations” from time to time “around September 2001” in which there was a discussion in terms to the effect there set out as to the terms of their agency relationship – see [236] below.)

13. [23]

    This brings me to the critical conversation on which Ms Anthony’s pleaded oral agency agreement (defined as the Agency Agreement) rests (see [8] of the further amended statement of claim). I say “pleaded” agreement because although Ms Anthony’s pleaded case puts the making of the alleged oral agreement as occurring in or about March 2002, in closing submissions, Senior Counsel for Ms Anthony appeared to contemplate the possibility that the agreement may have been concluded at a later date (see T 415.11, where it was submitted that certainly “by 2005” there was an agency agreement with clearly articulated terms agreed to by Ms Morton); and treated the March 2002 date as the first time when, on Ms Anthony’s case, the terms were clearly articulated and agreed by Ms Morton (see T 414.45).

14. [24]

    Ms Anthony has deposed that in or about March 2002 she and Ms Morton had a telephone conversation during which she agreed to act as Ms Morton’s literary agent and negotiate publishing agreements on her behalf “on certain terms” (see her first affidavit at [20]). I will consider in due course the various versions put by Ms Anthony as to what is said to have been said in that conversation (see [227]ff below). Cross-examined as to the basis on which she had attributed a March 2002 date to that conversation, Ms Anthony was vague, to say the least. At one stage, Ms Anthony suggested this was by reference to an unidentified document (see T 140.35-40; T 142.31) but I was taken to no such document.

15. [25]

    Ms Morton denies the alleged March 2002 telephone conversation (see for example at [176] of her first affidavit), whether occurring at that time or at any time. Ms Morton’s evidence in this regard is that: by late 2001 she was soon due to submit her Masters’ thesis in English literature ([22]); she submitted her thesis in or around mid-March 2002 and the following week started a PhD in English Literature on a scholarship from the University of Queensland; she taught casually at the university throughout 2002 and also worked as a research assistant; and she wrote a “few synopses for possible novels” in that period but was busy in other areas “and didn’t get much further than jottings in a notebook” ([23]).

16. [26]

    Ms Morton’s evidence is that she started writing what would become her first published book (“The Shifting Fog”) in or around summer 2003/2004 ([25]) and that her next contact with Ms Anthony (after late 2001) with respect to her publishing prospects was when she sent a partial manuscript of that book to Ms Anthony in the second half of 2004 (see [26]).

17. [27]

    Ms Anthony’s account of the timing of those events varies from that of Ms Morton (as I explain below – see [28]). As adverted to above, Ms Anthony says that she received two manuscripts from Ms Morton in 2002 (see her first affidavit at [21]), one of which she offered around to publishers but without being successful in finding a publisher to “take it on”; but that she encouraged Ms Morton to keep writing. Ms Anthony’s recollection (in her first affidavit) of the year in which she received the first two manuscripts is obviously incorrect (as Ms Anthony seemed at first to accept in cross-examination – see T 139.1, saying that “the years are a bit shaky” but then maintaining that “if I’ve said 2001 that would be right”), having regard to the date of the rejection letter from HarperCollins in relation to the second of those two manuscripts (28 September 2001; Exhibit 8, CB 6/2091).

18. [28]

    Ms Anthony deposes (cf. Ms Morton’s account noted at [26] above) that Ms Morton started writing the novel which would become “The Shifting Fog” in late 2002 (see her first affidavit at [22]). She deposes that Ms Morton sent her extracts of the work in progress; that she mentored Ms Morton throughout the writing of this book; and that Ms Morton’s pregnancy delayed the finishing of the manuscript ([22]).

19. [29]

    Ms Anthony points, in support of that account of events, to a Sydney Morning Herald article dated 20 October 2012 in which Ms Morton was quoted as saying that, after reaching the halfway point on her third book (which became “The Shifting Fog”), she had her first baby and put the manuscript aside; and, to an article dated 26 December 2006 in which Ms Morton was quoted as saying that “By this time I had a small child....I sent this new manuscript to Selwa in sections and then I stalled and hadn’t written for a few months, I had it plotted out but I just slipped out of it. Then Selwa rang and said ‘when can you finish it? A publisher is interested’”.

20. [30]

    Ms Morton’s evidence, to the contrary, is that she started writing this novel later than that. Her first child was born in July 2003 and she has deposed that it was while she was at home on maternity leave that she had an idea for a story ([24]). She deposes that, in or around summer 2003/2004, when her child was about six months old, she started writing what would become her third completed manuscript (and first published novel) ([25]); and (as noted above) that it was in the second half of 2004 that she sent a partial manuscript to Ms Anthony ([26]).

21. [31]

    Ms Wilkins’ recollection (see her affidavit of 27 September 2017 at [34]) is that Ms Morton started the manuscript for the book that became “The Shifting Fog” when she was pregnant (she recalled sitting by the fireplace in winter in the living room of Ms Morton’s house “talking about her ideas”).

22. [32]

    Leaving aside, for the moment, the varying accounts as to when Ms Morton commenced writing what became her first published novel, Ms Morton’s evidence that she sent a partial manuscript of “The Shifting Fog” to Ms Anthony in the second half of 2004 is not inconsistent with Ms Anthony’s evidence that, by March 2005, she had a 100,000 word unfinished manuscript of the book which she sent to A&U (see [23] of Ms Anthony’s first affidavit), though on Ms Morton’s own account the manuscript must have been sent to A&U earlier than March 2005, since she says that she received a call from a publisher in around January 2005 in relation to the manuscript (see [33] below).

23. [33]

    Ms Morton’s evidence is that in or around January 2005 she received an unexpected telephone call from Ms Anthony who said words to the effect that Annette Barlow from A&U (who in due course became and has remained Ms Morton’s Australian editor) had read the partial manuscript and wanted to see the rest (see Ms Morton’s first affidavit at [27]). It is not disputed that Ms Morton was not aware at the time that the partial manuscript was being forwarded to a publisher. Ms Anthony’s evidence is that she does not as a rule tell authors when or to whom she is submitting their partial manuscripts (see [2](28) of her second affidavit) and she deposes that “it is very unusual to submit a partial manuscript by an unpublished and unknown author”. (In submissions it was argued that the fact that Ms Anthony felt comfortable sending a partial manuscript to a publisher is consistent with her account that she had been reviewing extracts of the manuscript and mentoring Ms Morton in relation thereto for a period of time before sending the manuscript to A&U.) (I note that there is no evidence that the manuscript was sent to anyone other than A&U at the time.)

24. [34]

    Ms Anthony has deposed that Ms Barlow (of A&U) was very excited with what she had read and asked when the final quarter would be finished; and that she (Ms Anthony) asked Ms Morton “to put everything else on hold, get a babysitter and finish the manuscript in a month”, which Ms Morton did (see Ms Anthony’s first affidavit at [23]). Ms Anthony says Ms Morton first said it would take her eight weeks to finish and that she, Ms Anthony, urged Ms Morton to finish it sooner than that. Ms Morton, on the other hand, says that Ms Anthony asked her how long it would take to finish the manuscript; that she told Ms Anthony she could finish it in a month; and that she then mapped out 28 days of babysitting for her child and completed the manuscript within a month (Ms Morton’s first affidavit at [29]).

25. [35]

    Ms Morton says that she posted the completed manuscript to Ms Anthony in around early March 2005 ([29]). Ms Anthony says that the manuscript was completed in or about early April 2005 (Ms Anthony’s first affidavit at [23]).

26. [36]

    Nothing turns on the difference in the witnesses’ recollections of these events (i.e., the events referred to at [34] and [35]), other than it points to the difficulty in plotting an accurate timeline of events that long ago and shows that there is some unreliability in the recollection of events on the part of both of the principal witnesses. What is clear on the documentary evidence is that, in May 2005, A&U made an offer to publish the book, of which offer Ms Anthony informed Ms Morton by email on 2 May 2005. (I pause here to note the evidence of Ms Hanet-Hutchins, Ms Anthony’s assistant, that Ms Anthony does not usually type her own emails and that they are typed, by Ms Anthony’s assistants, based on handwritten notes or dictation.)

27. [37]

    There is a reference in that A&U email to the sale of the manuscript in a “World Rights Deal”. Ms Morton’s evidence (at [30] of her first affidavit) is that Ms Anthony explained to her that this meant that A&U “might even be able to get you a nice little overseas deal”. (The casual reference to such a deal is consistent with the informal, conversational tone of many of the emails between the two, even at the time of termination by Ms Morton of the agency relationship.)

28. [38]

    Ms Morton’s evidence is that she did not know at the time (i.e., around May 2005) that there was any other way to sell rights and that Ms Anthony did not explain to her that there were any alternatives (see [31]). Ms Anthony disputes this, although she does not give any clear account of a conversation or conversations in which this was explained. I consider this issue in more detail when I come to deal with Ms Morton’s cross-claim.

29. [39]

    Ms Anthony’s response to that evidence from Ms Morton (see [28] of her third affidavit) is that by April 2005 “Ms Morton was an unknown author with an unfinished manuscript”; that even when it was complete it still needed a “tremendous amount of editing”; and that the circumstances at the time were “fortuitously unique in that Allen & Unwin took interest in the manuscript and made an offer that was very generous for a first time author”. It is to be noted Ms Anthony does not there suggest that she gave any advice to Ms Morton at the time as to the additional commission(s) that would be payable under a world rights deal as compared to a territory by territory deal.

30. [40]

    In both her second and third affidavits (see at [2](30); [29] of the respective affidavits), Ms Anthony deposes to a conversation with Ms Morton (the date of which is not identified, but by reference to the context is seemingly at the time of the offer for Book 1 in May 2005) in which she says she told Ms Morton words to the effect:

31. [41]

    Again, no account is there given of the additional layer(s) of commission for a world rights arrangement.

32. [42]

    In her third affidavit (at [29]), Ms Anthony adds to her account of the above conversation the following:

33. [43]

    Pausing here, the account given in the third affidavit (at [29]) is the first (and, so far as I can see, only) account by Ms Anthony of any conversation in which there is any reference to the financial implications of a world rights deal compared to a territory by territory deal; and even on this account it was only by reference to the amount of the advance (which the evidence elsewhere makes clear was $15,000), i.e., Ms Anthony says that she said the advance would be “much less” if limited to Australia and New Zealand (implicitly, without world rights).

34. [44]

    It is also relevant to note (having regard to the allegations made as to breach of fiduciary duty, to which I will turn in due course) the references in the above passage to A&U’s resources to negotiate overseas deals and its reputation with overseas publishers and agents, which suggest that Ms Anthony saw a benefit (to Ms Morton and/or herself) in A&U performing what would otherwise have been Ms Anthony’s role, as agent, had the publishing rights been dealt with on a territory by territory basis. In the witness box Ms Anthony was firm in her evidence that she was competent to carry out such a role but (see T 182.45) that she could not have done the work herself as efficiently or as professionally (as A&U). Ms Anthony’s evidence is that it was not beyond her ability but that Ms Morton was exceptional (T 182) and that it was best that A&U protected and looked after Ms Morton (see T 183.15).

35. [45]

    As to Ms Morton’s evidence (at [32] of her first affidavit) (that, as far as she was aware, Ms Anthony did not show the manuscript of “The Shifting Fog” to any other publishers) and her understanding that Ms Anthony did not offer her print book publishing rights to any publishers other than A&U ever, Ms Anthony’s response in her second affidavit at [2](32) (which I take as tacit acceptance that she did not approach other publishers at the time) was that she had identified A&U as being the publisher for Ms Morton’s works.

36. [46]

    Acceptance of the A&U offer led to the first publishing agreement (dated 4 May 2005) between Ms Morton and A&U (The Shifting Fog Agreement) (Exhibit 8, CB 6/2108). The advance payable was $15,000 on account, and in anticipation, of royalties due under the agreement. The agreement permitted A&U to sub-license the rights of publication in English language territories (amongst other rights) subject to payment to Ms Morton of 80% of the net amount paid to A&U (this being the world rights aspect of the deal to which I have referred above).

37. [47]

    Ms Morton was described on the first page of the agreement as “Kate Morton of Selwa Anthony Author Management Agency”. Clause 24 of the agreement (the Agency Clause) (on which Ms Anthony has clearly placed great weight over her years as a literary agent, as I will explain in due course) was in the following terms:

38. [48]

    In substance an identical clause was contained in each of the six A&U publishing agreements, the only difference being as to whether the authorisation was given in terms to Ms Anthony or to “Selwa Anthony Author Management Agency”.

39. [49]

    Ms Morton’s evidence is that around this time, as the first publishing agreement was being prepared, Ms Anthony asked her whether she knew that her fee was 15% and that Ms Anthony said to her words to the effect “Did Kim tell you that I take 15%?” (see Ms Morton’s first affidavit at [33]; cf., Anthony’s evidence at [2](33) of her second affidavit; [30] of her third affidavit; and her account in her second affidavit where she reiterates part of the alleged mid-March 2002 conversation in this context).

40. [50]

    Ms Morton’s evidence is that she told Ms Anthony that she did know this. She says that she had gained this knowledge during the years of her friendship with Ms Wilkins before she (Ms Morton) was published but that “[t]his knowledge was not imparted in relation to my own prospects”(see [33] of Ms Morton’s first affidavit). In cross-examination, she said that this knowledge was acquired “osmotically” (evidence that Ms Anthony characterises as disingenuous – see [213] below). Relevantly, Ms Morton’s understanding, as gleaned from her conversation(s) with Ms Wilkins, was that Ms Anthony would take 15% of the advance ([33] of Ms Morton’s first affidavit).

41. [51]

    In the witness box, Ms Morton was adamant that her understanding was that the 15% commission related to advances not royalties (though as will be seen, there was no demur from Ms Morton when Ms Anthony started deducting her 15% commission from royalties paid after the advance was earned out). Ms Morton’s evidence (which Ms Anthony disputes) is that she was not aware in May 2005 of the way royalties, beyond the advance, were earned and paid to authors ([34]; cf. Ms Anthony’s second affidavit at [2](34); third affidavit at [35]).

42. [52]

    Ms Morton does, however, say that Ms Anthony gave her two pieces of information about the terms in her first publishing agreement (see at [37] of Ms Morton’s first affidavit): first, that Ms Anthony had excluded audio and film/TV rights – because she had a contact in audio (which accords with what in fact transpired in relation to those rights) and that cl 24 “just gives the publisher permission to send me [Ms Anthony] your money so that I can send it to you” (which, in my opinion, all that the Agency Clause effectively does by including the Agency Clause (apart from evidencing that there is an agency relationship in existence); i.e., it is a direction by the author to the publisher as to how payment is to be made of sums due to the author – authorising the payment of royalties to the named agent such that the publisher’s obligation in relation to the payment of royalties is discharged by payment to the named agent).

43. [53]

    Ms Anthony, to the contrary of Ms Morton’s evidence, deposes that she explained to Ms Morton the way royalties worked and that she explained to Ms Morton “that there is an agency clause in every Publishing contract because it is evidence that I did the deal, acknowledging me as the agent and ensuring the publisher pays all monies due under the contract to me” (a part of her second affidavit that I provisionally read, with leave to adduce the contents of the conversation orally – [2](37)). Again, such an explanation of the Agency Clause is not inconsistent with the way that I read cl 24. However, it is not consistent with the understanding that Ms Anthony adamantly expressed in the witness box as to the clause being her protection in the absence of a written agreement.

44. [54]

    Ms Anthony says that Ms Morton delivered the manuscript for Book 1 in September 2005 (see Ms Anthony’s first affidavit at [29]). It is not disputed that “The Shifting Fog” was published in Australia and New Zealand on or about 1 July 2006. (It was published in the United Kingdom and Ireland on or about 15 June 2007 and in the United States and Canada on or about 22 April 2008 – in countries other than Australia and New Zealand under the title “The House at Riverton”.)

45. [55]

    The book was promoted (prior to its publication in Australia and New Zealand) at a book fair in Frankfurt in or around October 2005. Ms Morton’s evidence is that A&U took the unpublished manuscript to the Frankfurt Book Fair (see [41] of her first affidavit); and that, following that, Ms Barlow sent her an email on 1 November 2005 advising that there had been a lot of interest in “The Shifting Fog” at the book fair and asking whether she had a synopsis for a second novel (see [42] of that affidavit). Ms Morton deposes that Ms Anthony, who had been copied in on the 1 November 2005 email, stated that all contact except editorial must go through her (Ms Anthony) and that she would advise Ms Barlow of this (see [43]). That Ms Anthony did so is evident from subsequent correspondence from Ms Barlow to Ms Anthony in January 2006 (see [59] below).

46. [56]

    In February 2006, Ms Anthony negotiated an audio book publishing agreement in relation to “The Shifting Fog”, with an audio book publisher (Bolinda Publishing Pty Ltd) (Bolinda) (see her first affidavit at [58]ff). That agreement was entered into by Ms Morton on 21 March 2006 (Exhibit 8, CB 2171) and provided for an advance of $2,500 on signature on royalties of between 8 and 12.5%. The agreement authorised Bolinda to make payments in respect of the works to “Selwa Anthony Author Management” (by then, the owner of this registered business name was SAPL).

47. [57]

    Also in 2006, shortly before the July 2006 publication in Australia and New Zealand of “The Shifting Fog”, the book was promoted at the 2006 London Book Fair. It was then that Ms Maria Rejt (a publisher from Pan Macmillan in the United Kingdom, who in due course became and remains Ms Morton’s London editor) first became aware of Ms Morton’s work (see [3] of Ms Rejt’s affidavit affirmed 14 December 2017). This led to the acquisition by Pan Macmillan (through A&U, which, as already noted, held the world rights) of publishing rights for Ms Morton’s first two books in the United Kingdom and Ireland. As adverted to above, the first book was re-edited and re-titled “The House at Riverton” before its publication in the United Kingdom and Ireland. Ms Rejt explained in the witness box that by the time Pan Macmillan acquired the publishing rights it was too late to change the title in advance of the publication of the book in Australia and New Zealand (hence the dual titles for the first book). It was also published in the United Kingdom and Ireland with a different dust jacket design (see T 343.46-344.14).

48. [58]

    In 2008, Ms Anthony also negotiated a large print book publishing agreement in respect of “The Shifting Fog”, with Center Point Inc, a large print publisher in the United States (see her first affidavit at [63]ff; CB 2305). That agreement was entered into on 24 January 2008 and authorised all moneys to be paid to SAPL.

49. [59]

    Meanwhile, before the publication in any territory of Ms Morton’s first novel (that being in Australia and New Zealand on 1 July 2006), and consistent with the interest expressed by Ms Barlow to Ms Morton in November 2005, A&U contacted Ms Anthony in January 2006 to express interest in making an offer for Ms Morton’s next novel (see email dated 23 January 2006 from A&U to Ms Anthony – Exhibit 8, CB 2130). Ms Morton had by then written a synopsis for that novel (then titled “The Authoress”) following Ms Barlow’s November 2005 request (see at [45] of Ms Morton’s first affidavit).

50. [60]

    A&U’s offer for the second novel was on the same terms as the first except that the advance was $25,000. Ms Anthony describes that advance as “a healthy increase from Book 1 … as there were no sales records yet to support it and [it] would easily be earned out by the author to receive ongoing royalties” (see her first affidavit at [31]). Ms Anthony deposes that she negotiated an arrangement whereby, once advances had been “earned back” for the first two novels, any royalty amounts over $200 would be paid within six weeks of receipt (as opposed to six monthly payments) (see her first affidavit at [32]).

51. [61]

    The Forgotten Garden Publishing Agreement, though dated 4 May 2005, was executed on 15 February 2006 (see Exhibit 8, CB 6/2115). The agreement again noted Ms Morton’s address on the first page as “of Selwa Anthony Author Management Agency” and contained the same cl 24, naming Ms Anthony as authorised to act as Ms Morton’s agent in connection with the agreement. As with the first agreement, the second publishing agreement was a “world rights” deal.

52. [62]

    Soon after signing the second publishing agreement, Ms Morton became aware that A&U had sold her first two books to a number of international territories, including Italy, Germany and France (see her first affidavit at [48]).

53. [63]

    The manuscript for Book 2 was delivered in November 2007. “The Forgotten Garden” was published in Australia and New Zealand on or about 1 July 2008; in the United States and Canada on or about 7 April 2009; and in the United Kingdom and Ireland on or about 15 June 2009.

54. [64]

    An audio book publishing agreement dated 14 December 2007 was entered into with Bolinda, again authorising Bolinda to make payments in respect of the work to “Selwa Anthony Author Management Agency”. Similarly, a large print book publishing agreement in respect of “The Forgotten Garden” was entered into with Center Point Inc on 3 February 2009. As with the first large print contract, this again authorised all moneys to be paid to SAPL.

55. [65]

    On 4 June 2007 (i.e., before publication in any territory of Ms Morton’s second book and shortly before the publication in the United Kingdom and Ireland on 15 June 2007 of Ms Morton’s first book), A&U made an offer to publish Ms Morton’s third and fourth books (see Exhibit 8, CB 2232; Ms Anthony’s first affidavit at [36]).

56. [66]

    Ms Anthony accepts that by this time “The Shifting Fog” had been “very successful”. Ms Anthony has also deposed to the negotiation in which she engaged with A&U in respect of the size of the advance to be payable per title for the third and fourth books (see her first affidavit at [37]-[39]).

57. [67]

    Under the 2007 agreements, A&U again acquired the world rights. In her third affidavit (at [41], Ms Anthony deposes as follows in relation to this issue (in the course of responding to [49]-[50] of Ms Morton’s first affidavit):

58. [68]

    Ms Anthony asserts (at [42] of her third affidavit) that she explained the content of the agreements for Books 3 and 4 to Ms Morton over the telephone. She says that at that stage there was no guarantee at all “when Ms Morton contracted for and received her further advances that any subsequent books would enjoy the same success as the first”. Relevantly, although Ms Anthony asserts that it was her practice to inform Ms Morton and her husband “of every step from the time of the offer to when the contracts were signed” (her first affidavit at [37]), it proved difficult for Ms Anthony in the witness box to articulate the detail of what she says was said to Ms Morton (or to Ms Morton’s husband) in relation to the offers.

59. [69]

    Pausing here, a number of observations may be made about Ms Anthony’s account given at [41]-[42] of her third affidavit.

60. [70]

    First, it is abundantly clear that, as at 9 July 2007 (the date on which the publishing agreements for Books 3 and 4 were signed), it would not have been correct to describe Ms Morton as an “unpublished” author: her first novel had been published in Australia and New Zealand in July 2006 and in the UK and Ireland on 15 June 2007 (as Ms Anthony’s affidavit recognises). Nor could it have been correct at that stage to describe Ms Morton as an “unknown” author – at least in publishing circles – given the level of pre-sales and interest in her first book and the then imminent publication in the United Kingdom and Ireland of that book (see below at [71]; Ms Rejt’s evidence referred to at [378] below). Indeed, at [39] of her third affidavit, Ms Anthony describes Ms Morton as being “an international bestseller” after she published her first book (ascribing this to several reasons including “steps taken by Allen & Unwin to market, publicise and sell the book in Australia and New Zealand and to make sure the same care and attention was provided by her publishers in the overseas markets”).

61. [71]

    By email on 30 June 2007, Ms Anthony had been advised (by Ms Rejt) that, by the next week, there would be 205,000 copies in print of the UK edition of Book 1, that total orders to that date were 170,000, and that Book 1 was at number 8 on Amazon (see Exhibit 8, CB 6/2260). By 4 July 2007, another 25,000 copy reprint had been ordered and sales were just over 18,000 per week (Exhibit 8, CB 6/2261). As at 5 July 2007, an Italian book club deal was about to be signed for Book 1 with a guaranteed first print of 4,000 copies (Exhibit 8, CB 6/2263) and by 5 July 2007 Book 1 was number 4 at Amazon (Exhibit 8, CB 6/2264). On 6 July 2007, Ms Rejt advised that another reprint of 55,000 had been ordered, taking the total reprint to 300,000 (Exhibit 8, CB 6/2265).

62. [72]

    Therefore, while it may readily be accepted (as a matter of common sense if nothing else) that there would have been no guarantee, at the time the publishing agreements for Books 3 and 4 were signed, that those yet to be written books (or Book 2 for that matter) would prove as successful as the first by that stage had proved to be, it could not possibly be said that Ms Morton was an unpublished and unknown author in June/July 2007 (as Ms Anthony in the witness box accepted).

63. [73]

    Thus, on any objective view, if Ms Anthony’s professional opinion of what was the most advantageous course for Ms Morton as at June/July 2007 (when the A&U publishing agreements for Books 3 and 4 were negotiated and signed) was based on Ms Morton being an “unknown unpublished Australian author” (which seems to be the thrust of [41] of Ms Anthony’s third affidavit), then the premise for that opinion was clearly unfounded. Ms Anthony was well aware at that stage of the interest that Ms Morton’s first book had generated. More likely, it seems to me, is that Ms Anthony’s assertion (at [41] of her third affidavit) that she “explained” to Ms Morton in June 2007 her professional view as to world rights deals as there set out is a reconstruction or mis-recollection.

64. [74]

    Second, although Ms Anthony deposes to it being her professional view that, although commission would be paid to sub-agents, the increased sales “would ultimately maximise the income flowing to the author” and that says she explained this to Ms Morton on several occasions, she gives no account of any conversation where she did so. The only exchange in any conversation to which Ms Anthony deposes (see her third affidavit at [41]) in which the effect on income of a world rights deal is discussed, is that to which I have referred above at [43]. The conversation set out in Ms Anthony’s third affidavit (at [41]) goes no further than Ms Anthony asking Ms Morton if she is happy to have A&U as her publisher again, informing Ms Morton that A&U wanted world rights again (to which Ms Morton responded in the affirmative that she was very happy with A&U). The assertion that Ms Anthony explained the world rights deal with reference to additional commissions to sub-agents (see at [49]-[50] of Ms Anthony’s third affidavit) is not supported by any account given by Ms Anthony in her affidavit evidence or in her evidence in the witness box of a conversation in words to that effect.

65. [75]

    The Distant Hours Publishing Agreement and The Secret Keeper Publishing Agreements were both dated 9 July 2007 and are relevantly identical (Exhibit 8, CB 6/2266; 6/2274). For each book, Ms Morton was to be paid an advance of $150,000 on account, and in anticipation, of royalties under the agreement. Both agreements contained the same Agency Clause (cl 24), though now naming “Selwa Anthony Author Management Agency” as the entity to act as Ms Morton’s agent (though, of course, there was no such legal entity, it merely being a registered business name).

66. [76]

    In around June 2007, at around the time of publication in the United Kingdom of Book 1, “The House at Riverton” was featured on a British television show called “Richard and Judy’s Summer Picks” (see CB 2255B) (referred to during the hearing as the United Kingdom equivalent of the US “Oprah” show’s Book Club). Ms Anthony deposes that this strengthened the marketability of the book and enhanced Ms Morton’s success. It certainly seems to have precipitated (or coincided with) a high level of pre-sales (see [71] above).

67. [77]

    The manuscript for “The Distant Hours” was delivered in July 2010. The book was published in the United Kingdom and Ireland on or about 15 October 2010; in Australia and New Zealand on or about 1 November 2010; and in the United States and Canada on or about 9 November 2010 (Ms Anthony’s first affidavit at [43]).

68. [78]

    The manuscript for “The Secret Keeper” was delivered in April 2012. The book was published in the United Kingdom and Ireland on or about 11 October 2012; in the United States and Canada on or about 16 October 2012; and in Australia and New Zealand on or about 1 November 2012 (Ms Anthony’s first affidavit at [44]).

69. [79]

    Audio book publishing agreements and large print publishing agreements were entered into with Bolinda and Center Point, respectively, on the following dates: with Bolinda there was one agreement for both books dated 18 August 2009 authorising payments to Selwa Anthony Author Management Agency; with Center Point, there were agreements dated 23 November 2009 and 29 March 2012 respectively, authorising payments to SAPL.

70. [80]

    The publishing agreements with A&U for Ms Morton’s fifth and sixth published books (as had been the case with Books 3 and 4) were negotiated and executed at the same time; this being in mid-2010.

71. [81]

    Ms Anthony has deposed to the negotiation process in relation to those publishing agreements (see her first affidavit at [45]-[47]). At [46] of her first affidavit, Ms Anthony deposes that she emailed to Ms Morton a letter dated 13 April 2010 from A&U (Exhibit 8, CB 6/2380) containing its offer (which was for a two book deal with an advance of $600,000 for world rights against a royalty rate of 10% for the recommended retail price rising to 12.5% after sales of 15,000 copies of each book) (see email at Exhibit 8, CB 6/2379) and that she spoke with Ms Morton over the telephone. Ms Anthony deposes at [46] of her first affidavit that “I advised [Ms Morton] that I was going to ask for half the total advance, being $300,000, to be paid on signature”. Ms Anthony asserts that she explained that A&U’s offer included an increase in the percentage of royalties Ms Morton received from the subsidiary rights (from 80% to 90% for the English language rights and from 75% to 90% for the translation rights) and a “bestseller bonus” for each book, which meant an acceleration of royalties payable to Ms Morton (see her first affidavit at [45]).

72. [82]

    Ms Anthony’s response, by email on 14 April 2010 (Exhibit 8, CB 6/2383) to Ms Barlow, in respect of the A&U proposal was that:

73. [83]

    It is not clear to me to what the reference to “not wast[ing] anymore time” relates. There does not seem to be any suggestion that negotiations to that point had been protracted, nor is it clear what the apparent urgency of moving with the offer “immediately” was perceived by Ms Anthony to have been.

74. [84]

    The email forwarding the offer to Ms Morton read (Exhibit 8, CB 6/2379):

75. [85]

    It seems apparent that Ms Anthony considered that she had (at least to some extent) rushed Ms Morton to confirm acceptance of the A&U offer because, after Ms Morton had confirmed that she would write the email accepting the offer “now”, Ms Anthony emailed:

76. [86]

    Ms Morton’s email accepting the offer (Exhibit 8, CB 6/2385; 6/2387) stated that she was thrilled to accept the offer and to think that the relationship could continue over Books 5 and 6, stating that she was very confident with Annette’s and Robert’s commitment. There is nothing in the email communication between Ms Anthony and Ms Morton to suggest that Ms Anthony had explained to Ms Morton the financial consequences of the world rights deal (or the alternatives thereto) at this time.

77. [87]

    The Lake House Publishing Agreement and the Book 6 (then untitled) Publishing Agreement were both dated 3 May 2010 and again are relevantly identical (Exhibit 8, CB 6/2389; CB 6/2397). For each book, Ms Morton was to be paid an advance of $300,000 on account, and in anticipation, of royalties under the agreement. Both agreements contained the same Agency Clause (cl 24) as the original publishing agreement, though, as for Books 3 and 4, naming “Selwa Anthony Author Management Agency” to act as Ms Morton’s agent.

78. [88]

    The manuscript for “The Lake House” was delivered in January 2015. (Ms Anthony points out in her second affidavit that the delivery date was delayed, it being due “as per signed contract” no later than December 2013 but nothing here turns on that.) The book was published in the United States and Canada on or about 20 October 2015; in Australia and New Zealand on or about 21 October 2015; and in the United Kingdom and Ireland on or about 22 October 2015.

79. [89]

    The manuscript for Book 6 was due to be delivered in December 2015. It was published in Australia and New Zealand in September 2018 under the title “The Clockmaker’s Daughter” (after judgment in these proceedings was reserved).

80. [90]

    Again, audio book publishing agreements and large print publishing agreements were entered into with Bolinda and Center Point, respectively, on the following dates: with Bolinda there was one agreement for both books dated 20 May 2013 authorising payments to SAPL; with Center Point, an agreement dated 27 August 2014, but no agreement in relation to the sixth book. (Ms Anthony has explained that Center Point makes an offer when it knows there is a finished manuscript – hence there was no contract negotiated by Ms Anthony that was entered into with Center Point in relation to the sixth book; Ms Anthony’s agency having been terminated by then (see her first affidavit at [63]).)

81. [91]

    It is not disputed that between 2006 and 2015 advances and royalties earned on the sale of Ms Morton’s books (after deduction of sub-licence commissions in respect of the world rights) were paid to Ms Anthony (in accordance with the respective A&U and other publishing agreements) and that, after deduction of 15% commission, Ms Anthony remitted to Ms Morton (or as she directed) the balance. Ms Anthony’s husband (Mr Brian Dennis) has deposed to Ms Anthony’s receipt of royalties for Ms Morton and to the deduction of 15% agent’s commission in that period (see his affidavit sworn 28 September 2017 at [4]).

82. [92]

    Although there was a dispute between the parties, during 2015 and at around the time of termination of the agency relationship in December 2015, as to whether there had been a proper accounting for those payments, and Ms Morton’s cross-claim also raised allegations in that regard, ultimately that was not in issue at the hearing. Instead, Ms Morton simply presses for relief in relation to the alleged breaches of fiduciary duty and duty of care owed in contract and in tort, by reason of Ms Anthony’s advice that she enter into “world rights” deals for Books 3 to 6 and corresponding failure to advise as to the alternatives to this or the consequences thereof.

83. [93]

    Between 2005 and 2015, A&U negotiated a large number (according to Ms Morton, around 175 or so after the initial agreements in relation to her first two books) of print publishing agreements for Ms Morton’s novels with publishers in over forty territories (see [60] of Ms Morton’s first affidavit).

84. [94]

    Ms Anthony has deposed that the moneys remitted to Ms Morton (or associated entities) after commission totalled approximately $14,350,000 and that the total commission retained by her, or SAPL, was approximately $2,800,000 (see her first affidavit at [72]). At the hearing, the amount earned as royalties on the sales of the books was estimated as being in the order of some $17 million.

85. [95]

    Ms Morton has deposed that in around May 2010 (noting she had entered into the publishing agreements for Books 5 to 6 on 3 May 2010) she became aware for the first time that it was usual for a literary agent to sell foreign rights directly or work collaboratively with other agents, rather than through a world rights deal with a local publisher (see [65] of her first affidavit). Ms Morton also there deposes that:

86. [96]

    The circumstances in which Ms Morton says she first learnt of this were in a communication from a US literary agent, Ms Theresa Park, who wrote in an email to Ms Morton on 14 May 2010 (see Exhibit 8, CB 6/2408):

87. [97]

    Ms Morton’s evidence is that she rang Ms Anthony, who told her that she had “fixed things” so that Ms Morton was now paying 25% in total. The conversation between Ms Morton and Ms Anthony, as recounted in Ms Morton’s first affidavit (at [67]) which Ms Anthony denies, was to the following effect:

88. [98]

    I interpose to note that the suggestion that it was of benefit for there to be a single place for all overseas deals and publisher requests to go through is relevant to the complaint by Ms Morton that Ms Anthony had a conflict of interest, in that such an arrangement relieved Ms Anthony of work that would otherwise fall to her to perform as agent and hence she had a personal interest which conflicted with her duty to act in Ms Morton’s best interests.

89. [99]

    Ms Morton deposes that, based on the above conversation, she understood that she was paying a total of 25% commission on all foreign sales across all of her books ([68]), higher than what she had been told was the standard capped 20% commission but which she was prepared to accept. Ms Morton’s evidence is that she believed that the existing contracts for Books 1 to 4 had been renegotiated to reflect the reduced commission rate and that A&U had absorbed the sub-agents’ fees in its own commission. (She does not, however, suggest that there was any signed agreement with A&U to that effect; so how she thought this had been effected contractually is left unexplained.) Ms Morton’s evidence is that her concerns were allayed by the above conversation; and that she gave the issue no further thought until November 2015 (see [69]).

90. [100]

    Ms Morton’s complaint in this regard is that Ms Anthony failed to advise her: that there had been no change to the commission structure; that A&U would not absorb the sub-agents’ fees; and that Ms Morton would continue to pay full commission of up to 50% (for Books 1 to 4).

91. [101]

    Ms Anthony’s response to this evidence is: to deny that she did not go over deals or publishing agreements with Ms Morton or that she did not discuss the offers in respect of international deals and publishing agreements ([48] of her third affidavit); to deny that there is a usual practice for a literary agent in Australia to sell foreign rights directly or work collaboratively with other agents instead of a world rights deal with a local publisher, saying that a literary agent works on an individual basis in accordance with the terms of the agent’s contractual arrangements and instructions received from the authors ([52] of that affidavit); to assert that she recalls explaining to Ms Morton that in her experience an agent often does not negotiate the sale of world rights as part of publishing agreements ([53] of that affidavit); and to deny that Ms Morton would pay lower commissions to subagents if “we” approached them directly ([56] of that affidavit). Ms Anthony gives no account in her affidavit of any conversations with Ms Morton in which words to the effect of that which it is asserted (at [48], [49], [52] of her affidavit) were said.

92. [102]

    At [57] of her third affidavit, Ms Anthony deposes that:

93. [103]

    In response to [67] of Ms Morton’s first affidavit (the conversation extracted at [97] above), Ms Anthony has deposed (at [58]-[59] of her third affidavit) that:

94. [104]

    Ms Anthony’s denial that there is a usual practice for a literary agent to sell foreign rights directly is in general terms inconsistent with the evidence of other literary agents and publishers in this case (see below); and her assertion that a literary agent works on an individual basis in accordance with the terms of the agent’s contractual arrangements begs the question in this case as to what were those arrangements.

95. [105]

    From [86] of her first affidavit, Ms Morton deposes to the circumstances in which she says she came to realise that she had been paying “three full commissions for a decade”. In summary, those circumstances were as follows. Ms Morton and her family had moved to London in July 2015 ([86]). Ms Morton deposes that once in London she interacted more with her international publishers, asked them questions and spoke with other authors; and says she came to understand better how international publishing worked and how foreign sales were made ([87]). This led to her raising with Ms Anthony questions about the commissions she was paying ([90]).

96. [106]

    Ms Morton deposes to a telephone conversation with Ms Anthony on 11 November 2015 in which she says Ms Anthony told her that she had not retroactively amended the contracts for Books 1 to 4 and that only the contracts made in 2010 for Books 5 and 6 reflected a 10% commission to A&U ([91]). Ms Morton deposes that during the time (from 2010) that she believed A&U were only taking 10% commission A&U had actually been taking a full commission of 20% or 25% across international sales (before Ms Anthony took her 15% commission); and that Ms Anthony later verified that the subagents were taking an additional 10% income from Ms Morton’s gross income before forwarding the balance to A&U (see [93]), about which Ms Morton was very upset (see [98]; and see her evidence as to then being in a state of alarm). Ms Morton’s complaint in this regard is that she had been paying three full commissions amounting to almost 50% for a decade ([95]). (Ultimately, her claim for damages relates only to the A&U share of the commission in relation to the foreign territory publishing deals for Books 3 to 6.)

97. [107]

    Ms Morton deposes that, in the telephone conversation with Ms Anthony on 11 November 2015, Ms Anthony offered to lower her commission to 10% ([98]), an offer that Ms Morton says she accepted; but that, after this, Ms Anthony continued to take 15% commission ([100]). While Ms Anthony denies this conversation, she does confirm that, in a telephone conversation with Ms Morton (at an unidentified time but in context it must have been around the time of termination of the agency relationship or agreement), she had offered to lower the rate of her commission to 10% “for the publishing agreements upon renegotiating the backlist for books 1-4” but that this “never took place as she terminated not long after” (see [2](98); (99) of her second affidavit; and see (100)).

98. [108]

    It was against the above background (and the concerns to which Ms Morton deposed as to whether there had been proper accounting for her advances – see [71]-[84] of her first affidavit) that Ms Morton decided that she wished (amicably) to end her business relationship with Ms Anthony (see [106]-[107]; [111]; and [205] of her first affidavit).

99. [109]

    Before turning to the correspondence in which that decision was communicated to Ms Anthony, I note for completeness that in her 12 September 2017 affidavit (Ms Morton’s second affidavit) (at [72]) Ms Morton deposes that in 2014 Ms Anthony recommended that she accept a further world rights deal from A&U for Books 7 to 9 and that there was a conversation to the following effect: Ms Morton, saying “But shouldn’t we now be selling rights directly to my established international publishers like Pan Macmillan and Atria?” and Ms Anthony, saying “No, it’s much better to have all of your income and all of the publisher requests coming in through the one place”.

100. [110]

     I read the above, over the objection of Ms Anthony, simply as an assertion by Ms Morton. I was not taken to any documents relating to any offer by A&U for Books 7 to 9 (although in the submissions for Ms Anthony there was suggestion as to the negotiation by Ms Anthony of a contract for Book 7 – see [440] below).

101. [111]

     In terms of the chronology, the placement of such a conversation as occurring in 2014 does not sit altogether comfortably with the questions Ms Morton says she raised with Ms Anthony from about June 2015 as to the position with multiple commissions (see above). However, it may be that if (which Ms Anthony does not appear to accept, though her evidence was that a conversation of that kind did at some stage occur) such a conversation did occur at or about that time this was part of what prompted the enquiries that Ms Morton says she was making when she moved to the UK in 2015. This evidence was not explored in cross-examination and I simply note the seeming inconsistency at this point. That said, I accept Ms Morton’s evidence that it was not until November 2015 that she discovered that the position as to multiple commissions had not been “fixed” in 2010, having regard to the tone of her subsequent communications to Ms Anthony and the evident feeling expressed in her evidence in the witness box as to this discovery.

102. [112]

     On 11 December 2015, Ms Morton sent an email to Ms Anthony, attaching a letter dated 10 December 2015 advising Ms Anthony that she had decided she needed a new agent and notifying Ms Anthony that she had appointed David Higham Associates in London as her new agent. She also stated in that email (Exhibit 8, CB 6/2602):

103. [113]

     Although the position Ms Anthony has taken at some points in the subsequent communications seems to have been that this was not a termination (or valid termination) of the alleged agency agreement, it must have been clear by reference to this letter (and Ms Anthony certainly appears to have understood this to be the case) that Ms Morton was at the very least terminating the agency relationship between the two (something which, on Ms Anthony’s own account of the terms of the agency agreement, Ms Morton was free at any time to do).

104. [114]

     Ms Anthony has deposed to a telephone conversation with Ms Kremer on 15 December 2015 (see her first affidavit at [81]), following which she received an email dated 16 December 2015 (Exhibit 8, CB 7/2607) in which Ms Kremer made the proposal that: “agency” of the contracts for Books 1 to 6 be assigned to DHA; that DHA receive all income from the contracts and pass 7.5% of receipts to Ms Anthony; and that Ms Anthony receive (from Ms Kremer’s commission and not as a cost to Ms Morton) 1.5% of Ms Morton’s earnings on Book 7. In that letter, Ms Kremer said “You will share in Kate’s success on book 7 to compensate you for any loss of commission on books 1-6. This whole matter will be quickly agreed and I can get on with the process of shoring up your interests along with Kate’s”. Pausing there, this offer is premised on the assumption that there was something – there referred to as “agency of the contracts for books 1–6” – that was capable of assignment; whereas on Ms Morton’s case the agency agreement – whatever its terms – was terminated by the letter of 10 December 2015; and, in any event, what was contemplated by way of “assignment” of the “agency of the contracts” is by no means clear.

105. [115]

     That proposal was rejected by Ms Anthony, in a letter dated 21 December 2015 from Ms Anthony’s solicitor (see Exhibit 8, CB 7/2611). In that letter, which Ms Anthony accepts was written on her instructions (see T 114.10-114.15); after having lengthy discussions with her solicitor (see T 116.2-116.4); and upon receipt of legal advice (see T 114.20-114.21), Ms Anthony’s solicitor wrote that:

106. [116]

     As there expressed, it seems clear that Ms Anthony (through her solicitor) was asserting rights derived from the Agency Clause contained in the A&U publishing agreements to which (as is obvious by reference to those written agreements) Ms Anthony was not herself a party. (I refer in due course to Ms Anthony’s cross-examination on this issue, from which it is clear that Ms Anthony does not have a clear understanding of the legal import of the publishing agreements in this regard.) That Ms Anthony’ solicitor was there referring to the A&U publishing agreements was made clear shortly thereafter when, on 13 January 2016, Ms Anthony’s solicitor sent a further letter to Ms Kremer (Exhibit 8, CB 7/2616), stating that her client had further considered the proposal set out in Ms Kremer’s email and that:

107. [117]

     Neither this nor the previous communication from Ms Anthony’s solicitor made any reference to any oral contract between Ms Anthony and Ms Morton. The assertion, very clearly made in the 13 January 2016 letter, is that there are no express agency agreements (the agency agreement being said to be “constituted” by reference to the agency clauses in the respective publishing agreements).

108. [118]

     In cross-examination, Ms Anthony accepted that the 13 January 2016 letter reflected her instructions to her solicitor (T 121.35-121.37) and that at that time she understood that there were no express agency agreements between herself and Ms Morton (see T 119.15-119.36). That said (as I will come to in due course) what Ms Anthony’s admitted understanding that there were no express agency agreements encompassed is itself unclear. Ms Anthony appears not to have understood that an express agreement not reduced to writing but intended to be binding would nevertheless still have amounted to an express agreement. She also seems to have drawn a distinction between “agreements” and “contracts” (see later at [217]ff), explaining the former as being between author and agent; the latter between author and publisher (T 102.31ff; 104.48ff; T 130.27; and see T 137.0 – where she says that she never had a contract with Ms Morton; she had an agreement with Ms Morton). She was, however, adamant in cross-examination that there was an oral contract from the day Ms Morton “came into her agency” (see T 120.46-47) (though that day was not there specified) (and see T 137.13 where she maintains that she had an oral agreement). At T 139.26, Ms Anthony appears to place the time at which she started as Ms Morton’s agent as the time at which she accepted “the manuscripts”.

109. [119]

     The statement in the 13 January 2016 letter to the effect that there were no express agency agreements could only be consistent with the case as subsequently pleaded if understood as meaning that there were no written agency agreements. Even then, however, this does not explain how it was asserted that the agency agreement between Ms Morton and Ms Anthony was “constituted by the existing contracts with the agency clause in each and every contract” in circumstances where Ms Anthony was not a party to those contracts. It is difficult to see how the inclusion in the publishing agreements of the Agency Clause (amounting to a direction to pay to the agent amounts owing to the author under the agreement) could of itself constitute a contract between author and agent (though, as indicated earlier, I accept that it would evidence the existence of an agency relationship between the two).

110. [120]

     On 25 January 2016 (Exhibit 8, CB 7/2617), Ms Morton’s solicitor notified A&U that Ms Morton had terminated “the business relationship” with Ms Anthony as of 10 December 2015; advised that the authority granted to A&U under cl 24 of the publishing agreements was revoked as of that date; and advised that Ms Anthony no longer represented or acted for Ms Morton. The letter stated that, accordingly, A&U was not authorised to send to Ms Anthony any moneys due and payable to Ms Morton; and that A&U was not authorised to deduct any agency fees from payments due to Ms Morton, nor to pay Ms Anthony any fees from the author’s entitlement. A&U was requested not to send any materials including statements notices or other communications in connection with the publishing agreements to Ms Anthony.

111. [121]

     On 28 January 2016, A&U wrote to Ms Morton’s solicitors (Exhibit 8, CB 7/2622) noting that advice and confirming that A&U would remit all future moneys, without agency fee deduction, as had been directed.

112. [122]

     Consistent with A&U acting in accordance with the above communication, Ms Anthony has deposed (and it is not disputed) that, since 25 January 2016, SAPL has not been paid any money by A&U or any other publisher in respect of the publishing agreements and has not received 15% commission (see her first affidavit at [86]) on royalties earned from the sales of Books 1 to 6.

113. [123]

     On 2 February 2016, Ms Anthony’s solicitor wrote to Mr Gorman (the Chief Executive Officer of A&U) (Exhibit 8, CB 7/2623), referring to having seen a copy of the letter dated 25 January 2016 from Ms Morton’s solicitors to A&U and stating that she acted for Ms Anthony (and, inexplicably, Selwa Anthony Author Management Agency – which, as earlier noted, is simply a registered business name). The letter further stated that:

114. [124]

     From the sentence I have italicised in the above extract, it is clear that Ms Anthony is here accepting the termination of the agency relationship with Ms Morton (though continuing to assert a contractual entitlement to act as the author’s agent in connection with the A&U publishing agreements and to collect and receive all moneys payable to Ms Morton).

115. [125]

     On 8 February 2016, Ms Morton’s solicitor sent a letter (Exhibit 8, CB 7/2625) to Bolinda in similar terms to that earlier sent to A&U, advising Bolinda of the termination of the business relationship between Ms Morton and Ms Anthony and directing that all moneys due and payable under the publishing agreements with Bolinda be remitted without deduction to the author (at her direction to a particular bank account).

116. [126]

     By letter dated 9 February 2016 (Exhibit 8, CB 7/2627), Ms Morton’s solicitor responded to the communications received from Ms Anthony’s solicitor, rejecting the proposition that an agency agreement between Ms Morton and Ms Anthony was constituted by cl 24 of the A&U publishing agreements and seeking advice, inter alia, as to the precise terms and conditions of the “purported” agency and the basis on which Ms Anthony claimed an entitlement to fees prior to or after the termination on 10 December 2015. In that letter, it was also asserted that:

117. [127]

     Exactly what “presumptions, admissions and offers” were thought to have earlier been made (and were now said to be withdrawn) was not made clear by this letter. I can only assume that there was a concern that the 11 December 2015 letter contained (or may have contained) an admission by Ms Morton as to an ongoing agency agreement in relation to the publishing agreements or an entitlement to ongoing “backlist commission” or as to there being ongoing income to protect (see the words I have italicised in the extract from the 10 December 2015 letter at [112] above); and/or that the offer there foreshadowed from Ms Kremer was to be made on Ms Morton’s behalf. As to this, I note that in these proceedings Ms Anthony does rely on Ms Kremer’s offer as being consistent with Ms Morton’s understanding that there was a binding contract and informing the conclusion that there was an entitlement to ongoing commission (see [438]-[439] below; T 4.15) and argues that Ms Kremer’s offer was made as agent for Ms Morton (both of which propositions Ms Morton disputes). Reliance is also placed on the offer by Ms Kremer as being consistent with industry practice (T 4.15).

118. [128]

     By letter dated 10 February 2016 (Exhibit 8, CB 7/2631), Ms Anthony’s solicitor again wrote to Mr Gorman, referring to her earlier 2 February 2016 letter and stating (emphatically – having regard to the use of the descriptor “absolutely”), that:

119. [129]

     Pausing here, it is relevant to note that what is there being asserted is an entitlement based on one or more of three things: the express and implied terms of the A&U publishing agreements (to which Ms Anthony was not a party); the trade custom and usage in respect of agency clauses in publishing agreements (on which Ms Anthony relies in these proceedings by reference to statements in a text on publishing law and evidence from a publisher, Ms Shona Martyn); and the decade long course of dealings between the parties (presumably a reference to Ms Anthony and Ms Morton).

120. [130]

     The first is in my opinion untenable because, whatever the express and implied terms of the A&U publishing agreements, Ms Anthony was not a party thereto and there is no suggestion (nor was it pleaded) that in some fashion Ms Morton held the benefit of any contractual chose in action under those agreements on behalf of Ms Anthony. The second, as I will explain in due course, suffers from the problem that the evidence of custom and usage is (perhaps, not surprisingly) that agency clauses are dependent on what the parties have agreed in their particular case (which begs the question whether Ms Morton and Ms Anthony ever agreed that the Agency Clause in the A&U publishing agreements was to amount to an irrevocable direction which could not be revoked by Ms Morton without Ms Anthony’s consent). The third is almost impossible to understand because the “decade long” dealings between Ms Morton and Ms Anthony did not encompass any previous termination of the agency relationship (and hence cannot have given rise to a course of dealing binding Ms Morton as to what was to happen once the agency relationship was in fact terminated).

121. [131]

     The 10 February 2016 letter from Ms Anthony’s solicitor sought an express written undertaking from A&U, by close of business on 12 February 2016, that A&U “will not in fact account directly to Ms Morton or as she directs for royalties or other payments received on her account” (emphasis in bold and underlining as per original), failing which Ms Anthony expressly reserved her right to seek injunctive or other relief without further notice to A&U, Ms Morton or her legal representative. In cross-examination, Ms Anthony accepted that this letter was written with her approval (see T 122.43-122.50). There is no reference in that letter to any oral agreement. Ms Anthony said in cross-examination that she “never thought about having to put oral agreement in” that letter (see T 122.50), stating that she “was just going along with the way I work, and I just assumed my oral agreement” (see T 125.2-125.3).

122. [132]

     On 12 February 2016, Ms Anthony’s solicitor sent a further letter to Mr Gorman of A&U (Exhibit 8, CB 7/2633), responding to a letter received from Mr Gorman (Exhibit 8, CB 7/2635) in which he had set out A&U’s (correct, in my opinion) understanding of its legal position (including that the publishing agreements were between A&U and Ms Morton and imposed a contractual obligation on A&U to pay moneys from those agreements to Ms Morton or as she directed; and that the authority or direction contained in those agreements from Ms Morton to A&U to pay all sums of money to Ms Anthony had now changed).

123. [133]

     The response from Ms Anthony’s solicitor asserted (again emphatically, this time having regard to the emboldening and underlining contained in the letter) that Mr Gorman’s understanding of the legal position in respect of agency clause 24 was “incorrect”. The letter stated that:

124. [134]

     In cross-examination, Ms Anthony accepted that this letter was sent on her instructions and after she had seen a draft thereof (see T 126.14-126.20).

125. [135]

     On 15 February 2016, Ms Morton’s solicitor sent a notice of breach to the directors of Bolinda (Exhibit 8, CB 7/2636), referring to a letter dated 12 February 2016 that had been received from one of the directors of Bolinda. Ms Morton explains in her first affidavit (at [208]) that this was issued after Bolinda refused to pay her any royalties until the dispute with Ms Anthony had settled. The asserted breach as described by that letter was a statement in Bolinda’s letter that it would withhold payments due under the publishing agreements until an “ongoing legal dispute” was resolved between the author “and a person who, by your own admission, is not a party to the Publishing Agreements”.

126. [136]

     By letter dated 25 February 2016, solicitors acting for A&U wrote to Ms Anthony’s solicitor, stating their view that A&U was not in a position to comply with a request to pay moneys owing to Ms Morton to Ms Anthony or to suspend those payments. In that letter, reference was made to the fact that the A&U publishing agreements were between A&U and Ms Morton “only”. The letter referred to the doctrine of privity of contract; noted that the obligation under cl 9 of the agreements was to pay moneys owed to Ms Morton to her or as she directed; noted cl 24 of the agreements; noted that cl 24 “did not state that the authority or direction was irrevocable nor that any change required your client’s agreement”; stated that cl 24 did not affect A&U’s primary obligation to pay royalties to Ms Morton; referred to the notification received from Ms Morton of revocation of Ms Anthony’s authority to act on Ms Morton’s behalf and the revocation of any authority or direction to pay money, owed to Ms Morton, to Ms Anthony; and stated that:

127. [137]

     After reiterating the view stated in the first of the two paragraphs extracted above, the letter went on to note that:

128. [138]

     The response from Ms Anthony’s solicitor, on 26 February 2016 (Exhibit 8, CB 7/2643) to A&U, again demanding an undertaking from A&U and this time foreshadowing “an urgent interim injunction by way of freezing order”, included the following:

129. [139]

     As I read the above, what was being asserted on behalf of Ms Anthony at this stage (leaving aside the somewhat surprising proposition that a clause in terms obliging A&U to pay royalties and to pay an advance on account of and in anticipation of all moneys due under the agreement – cl 9 – is a mere mechanical provision) appears to have been that there was a term implied in the A&U publishing agreements (again, it is to be noted that these were agreements to which Ms Anthony is not a party but which she was suggesting she was somehow entitled to enforce) first, by long established custom and usage applicable to the publishing industry that authors will “honour the express terms of the agency clauses of their publishing agreements” (said to be consistent with the intention of the parties) and, second, by reference to a course of dealings between “the parties”. It is not clear to which “parties” the letter is there referring (the parties to the alleged agency agreement or the parties to the A&U publishing agreements), although it was coupled with a reference to the dealings by A&U with royalties.

130. [140]

     Even if that assertion could be understood as being that there was an implied term in the A&U publishing agreements to the effect that the direction in cl 24 (the Agency Clause) would be treated as irrevocable (which is of itself problematic since the clause does not say that and it is by no means implicit that this would be the case either by reference to custom and usage or by reference to any course of dealings between A&U and Ms Morton), that still does not address the point raised in A&U’s solicitors’ correspondence that Ms Anthony is not a party to the publishing agreements. Thus, if this was an implied term of the agency agreement, it is not anywhere made clear how Ms Anthony considered that as a non-party she could enforce it. The reference to the doctrine of privity of contract in the correspondence from A&U’s solicitors clearly raises the issue as to how it could be said that Ms Anthony was able to enforce any implied contractual obligation on the part of Ms Morton (say, for example, an implied obligation under the publishing agreements not to revoke the direction contained in cl 24). However, the response from Ms Anthony’s solicitor does not grapple with that difficulty.

131. [141]

     I raise this at this stage because it is apparent from the exchange of communications between the respective legal representatives extracted above (and from the cross-examination of Ms Anthony to which I will refer shortly) that there has been a considerable lack of clarity as to the basis on which Ms Anthony claims an entitlement to commission for the period after termination of the agency relationship on or about 11 December 2015 when the letter of 10 December was emailed to Ms Anthony. The legal basis for that claim has been put in various ways in the correspondence and in different iterations of the pleadings.

132. [142]

     It seems clear that Ms Anthony has been labouring for some time under the misapprehension that being named in the Agency Clause (cl 24) in some way gave her a contractual entitlement, vis-à-vis A&U, to receive payment of royalties earned on the sale of Ms Morton’s books from which she would be entitled to deduct commission beyond the termination of her agency relationship (whether that relationship be one that was constituted under an oral agency agreement, as she contends, or simply by a course of dealings, as Ms Morton accepts). While that does not necessarily lead to the conclusion that the now alleged oral agency agreement is a recent invention on Ms Anthony’s part (as was submitted by Ms Morton), it does raise questions as to the reliability of Ms Anthony’s present recollection of events or conversations that were not raised by her when her claim was first asserted.

133. [143]

     On 23 March 2016, proceedings were commenced by Ms Anthony in this Court by the filing of a summons (Exhibit 8, CB 7/2647) in which the relief sought was a declaration that Ms Anthony “is entitled to payment from the Defendant of 15% of all sums of money payable to the Defendant by Allen & Unwin Pty Ltd (the publishers) pursuant to six agreements between the Defendant and the publishers” (being the six publishing agreements between Ms Morton and A&U referred to above) and an order that Ms Morton account to Ms Anthony for 15% of all sums payable to her by A&U pursuant to the six agreements. The relief claimed in the summons made no reference to any oral agency agreement.

134. [144]

     A copy of the summons was sent to the solicitors acting for A&U by letter dated 30 March 2016, in which confirmation was sought that no steps had been taken to amend any of the publishing agreements between Ms Morton and A&U and, in particular, that Ms Anthony was still named in those contracts “as the agent of record” (see Exhibit 8, CB 7/2646). The response thereto from A&U’s solicitors (Exhibit 8, CB 7/2657) was to decline to provide any substantive response on the basis that the publishing agreements were confidential to A&U and Ms Morton.

135. [145]

     The matter subsequently continued by way of pleadings, commencing with the filing of the initial statement of claim on 20 May 2016, of which there are various iterations (to which I refer below – see [153]ff).

136. [146]

     Meanwhile, the confusion as to the precise basis of Ms Anthony’s claim continued. By letter dated 21 April 2016 (Exhibit 8, CB 7/2658), apparently responding to an earlier request for an articulation of Ms Anthony’s claim, Ms Anthony’s solicitor wrote to Ms Morton’s solicitor, asserting that the summons that had been filed and served “clearly identifie[d] the nature of the claim as Contract”, and stating that:

137. [147]

     By this stage, therefore, the allegation was no longer that Ms Morton was bound by (or that Ms Anthony was able to rely upon) some implied term in the A&U publishing agreements; rather, it was being asserted that Ms Morton (as author) had entered into six oral contracts with Ms Anthony (as agent), which entitled Ms Anthony to a commission calculated by reference to a 15% share of royalties for the life of each of the six books. The written publishing agreements were, however, being called in aid as evidence of the alleged six oral contracts.

138. [148]

     A company named Nightofficer Pty Limited (Nightofficer) was incorporated on 27 July 2016. Ms Morton and her husband, Mr Davin Patterson, were the initial directors of Nightofficer and the sole shareholders of Nightofficer. Mr Patterson ceased to be a director on 5 July 2017. Ms Morton is now the sole director of the company. Both remain shareholders of the company. Ms Morton’s evidence in cross-examination was that Nightofficer was set up on the advice of her accountant (T 231.12). There is no reason not to accept that evidence.

139. [149]

     On 9 January 2017, Nightofficer, as “Proprietor”, executed a new publishing agreement with A&U in respect of Books 1 to 6. Under that agreement, the previous A&U publishing agreements (for Books 1 to 6) between Ms Morton and A&U were expressly terminated. On the same date, Nightofficer entered a publishing agreement with A&U in similar terms to the new publishing agreement in respect of the as yet unpublished (and indeed as yet unwritten) Book 7. Under these new publishing agreements, A&U did not obtain world rights in respect of the books. As to the Bolinda audio publishing agreements, the amended defence pleads (at [38](c)) that the contract for Book 1 expired on 21 March 2016, which is supported by the terms of that agreement (Exhibit 8, CB 6/2172). The amended defence also pleads (at [38](d)) that on 22 March 2016 Ms Morton terminated the Bolinda contracts referred to in paragraphs [34](b)-(e) of the amended cross-claim and Ms Morton states at [55] of her second affidavit that those agreements were terminated (although there is no documentary evidence of that termination). Nightofficer executed new audio book publishing agreements for Books 1 to 6 and Book 7 with Bolinda on 8 March 2017. Ms Morton signed these agreements for Nightofficer as its director. (Ms Morton also gave evidence that she had entered into a management licence agreement with Nightofficer in mid-2016 under which she licensed Nightofficer to contract her books – see T 295.1; however, there was no such agreement in evidence.)

140. [150]

     On 13 June 2017, Ms Morton, as “Assignor”, entered a Deed of Assignment with Nightofficer (Exhibit 8, CB 7/2848) under which she assigned copyright in Books 1 to 6 (and the unwritten Book 7) to Nightofficer. Ms Morton signed the deed as assignor; and she and Mr Patterson signed the deed on behalf of Nightofficer as assignee. Ms Morton’s evidence in cross-examination was that she assigned copyright to Nightofficer because a television company in the United Kingdom was interested in contracting one of her books and the company “required a deed of assignment in order to do that” (see T 228.26-228.29). Again, there is no reason not to accept Ms Morton’s evidence as to her motivation for assigning copyright to Nightofficer. (In written submissions, Ms Anthony argues that the Nightofficer transactions could be construed as attempts to defeat Ms Anthony’s claim in these proceedings – and this was in effect put to Ms Morton in cross-examination but denied – but there was no allegation in the pleadings to that effect and the delay between the termination of the A&U publishing agreements and the deed of assignment of copyright seems to me to be counter to the suggestion of the assignment of copyright being part of some scheme to frustrate Ms Anthony’s claim.)

141. [151]

     By letter dated 2 November 2017 (Exhibit 8, CB 7/2895), Ms Kremer, on behalf of David Higham Associates Limited (which I understand to be the same entity as David Higham Associates to which I have earlier referred and which I am here calling DHA), set out the terms and conditions on which DHA then acted for Ms Morton, which letter Ms Morton signed as acceptance and agreement with those terms. While there is no stated commencement date for the agency in that letter, the commission base (as defined in the Commissions Schedule) refers to moneys actually received by Ms Morton or DHA on Ms Morton’s behalf on or after 1 January 2017, from which it is reasonable to infer that there was an agency relationship from at least that time.

142. [152]

     In cross-examination, Ms Morton gave evidence to the effect that the terms of a written agency agreement had been agreed in early 2017 but the agreement itself was not executed until completion of a schedule setting out the commission rates (the agreement not finally being executed until sometime later). Ms Morton, however, seems to have regarded the negotiation of the terms of agreement as giving rise to a binding agreement prior to its formal execution; and presumably the parties acted on the basis of those terms during the period up to execution of the written document since there was no suggestion that there was any change in the terms of their agreement in the intervening period.

Pleadings

1. [153]

   By statement of claim filed by SAPL, as plaintiff, on 20 May 2016 (and verified by Ms Anthony), it was alleged (at [3]-[4]) that:

2. [154]

   Thus, by this stage, only one agreement was alleged – an agreement with SAPL (a company which did not exist at the time of the alleged agreement). That agreement was particularised in the statement of claim as being “partly express and partly implied”. To the extent that it was express it was said to be partly in writing and partly oral. The written part of the agreement was particularised as consisting of emails exchanged between the plaintiff (there, presumably referring to Ms Anthony who was not, however, the named plaintiff in the pleading) and the defendant at the time of entry into the agreement. The oral part of the agreement was particularised as consisting of a telephone conversation between the plaintiff and the defendant “in the first half of 2002”, when the plaintiff agreed to represent the defendant “after reading a first manuscript written by the Defendant”. The particulars further stated that:

3. [155]

   To the extent that the agreement was said to be partly implied, this was particularised by reference to “the publishing industry standard where authors pay their agent a percentage of income on every book that the agent has contracted for the author for the life of the work whether or not the author parts company with the agent” variously described in certain websites and sources there listed.

4. [156]

   Part of the relief sought in the original statement of claim was specific performance of the contract for the provision of literary agency services entered “in or about March 2002” by payment of the claimed commission continuing for the life of each work (see prayer 1).

5. [157]

   Ms Morton’s solicitor sought copies of the emails referred to in the particulars of the alleged agreement (Exhibit 8, CB 7/2676; 2677). The initial response from Ms Anthony’s solicitor to this request (Exhibit 8, CB 7/2678) (wholly unsatisfactory in my view and not consistent with the mandate by reference to which litigation in this Court is to be conducted- see s 56 of the Civil Procedure Act 2005 (NSW)) was to the effect that the “contents” of the documents referred to in the particulars were “a matter for evidence”; that “[y]ou and your client will be apprised of the evidence upon which the facts as pleaded will be proven, at the appropriate time”; and it was asserted that the statement of claim as pleaded included sufficient particulars as were necessary to apprise the solicitor and his client of the case to be met.

6. [158]

   Ms Morton’s solicitor proceeded to issue a notice to produce seeking production of the emails referred to in the particulars (Exhibit 8, CB 7/2682), drawing Ms Anthony’s solicitor’s attention to the decision in Pioneer Mortgage Services Pty Ltd v Australia and New Zealand Banking Group [2013] NSWSC 1107 as to a prima facie entitlement to be provided with documents referred to in the pleadings and also to r 21.10 of the Uniform Civil Procedure Rules 2005 (NSW).

7. [159]

   By letter dated 15 June 2016 in response (Exhibit 8, CB 7/2684), Ms Anthony’s solicitor cavilled with the proposition that Pioneer Mortgage Services Pty Ltd v Australia and New Zealand Banking Group stood as authority for the proposition that a party is prima facie entitled to be provided with documents referred to in the pleadings; asserted that it was “patently absurd to suggest that your client cannot identify the contract relied upon by our client in circumstances where she and her publisher were the other parties to the sending and receipt of the emails in question”; asserted that no legitimate forensic purpose for “your demand for production of evidence at this stage in the proceedings” had been identified and that the matters raised “in no way facilitate or promote the just, quick and cheap resolution of the issues in the proceedings”; and complained that the “unsealed” notice to produce failed to identify specifically the documents to which it referred. However, it was said that “to actually [sic] facilitate and promote the just, quick and cheap resolution of the real issues in the proceedings”, the solicitor had instructions to provide a hard copy of “such of the emails in question which have so far been able to be retrieved from 10 and 11 year old electronic databases”.

8. [160]

   That response, to put it charitably, is extraordinary. What the notice to produce dated 10 June 2016 required was the production of “[t]he emails exchanged between the Plaintiff and the Defendant at the time of entry into the agreement which are referred to in paragraph 4 of the Amended Statement of Claim served by you”. How it was thought that Ms Morton or her solicitors should be left to identify for themselves what emails were being referred to in the plaintiff’s own pleading is not explained. Why there was reference in the letter to emails sent by Ms Morton’s publisher, when the particulars referred to emails exchanged between the plaintiff and the defendant, is also not explained. And the criticism that there was no temporal restriction in relation to the documents sought to be produced fails to take into account that the notice refers to emails exchanged “at the time of entry” into the alleged agreement, which precisely mirrors the language of the particulars to the pleading at [4] of the statement of claim. That “time”, though not precisely identified in the particulars, would at least have directed attention to the first half of 2002; and, if reference were made to the prayers for relief, to “in about March 2002”.

9. [161]

   Perhaps even more extraordinary (having regard to the plaintiff’s pleading as it then stood) is the fact that the documents that were ultimately produced (which I understand to be those at Exhibit 8, CB 7/2686-7/2709) do not comprise any emails sent or received in the first half of 2002 (being emails in 2005, 2006 and 2007, respectively); include some emails between Ms Anthony and representatives at A&U or other publishers (not all of which are on their face addressed or copied to Ms Morton); and, so far as I can determine, do not refer (or on their face relate) to the terms of any agency agreement between Ms Morton and Ms Anthony – at most the emails evidence the existence of an agency relationship between the two.

10. [162]

    On 24 June 2016, an amended statement of claim was filed (Exhibit 8, CB 7/2711). The amendments are not identified on the document that was filed and the copy in the Court Book appears to be the same as the original statement of claim. By letter dated 27 June 2016, by which the so-called amended statement of claim was served, reference was made to the retention of new counsel in the matter and to an intention to file and serve a further amended statement of claim “to reframe aspects of the claim and the relief sought” but not materially to expand the claim.

11. [163]

    A further amended statement of claim was then filed on 18 August 2016 (Exhibit 8, CB 7/2725). In this iteration of the pleading, the name of the plaintiff was amended to that of Ms Anthony (though the verifying affidavit was drafted as a verification of the statement of claim on behalf of SAPL). The relief claimed was substantially amended (including the deletion of the claim for specific performance) and the claim was re-pleaded along the lines of that set out in a document subsequently filed on 7 September 2016 also titled the “further amended statement of claim”.

12. [164]

    The only difference I can discern between the two versions of the pleading titled “further amended statement of claim” is that in the latter there is a new affidavit verifying the claim (Ms Anthony now verifying the claim in her capacity as plaintiff rather than on behalf of SAPL). This is the final iteration of the pleading and henceforth when I refer to the further amended statement of claim it is to this document (filed on 7 September 2016).

13. [165]

    By the further amended statement of claim, Ms Anthony seeks declaratory relief to the effect that: in or about March 2002 she and Ms Morton entered into a contract for the provision of literary agency services – defined as the Agency Agreement (prayer 1); that the Agency Agreement entitles Ms Anthony to be designated as the agent on the record for each of the six books there identified in written, audio and large print form (prayer 2); and that the Agency Agreement entitles Ms Anthony to a commission of 15% of all royalties on all sales of the six books, for the life of each work (prayer 3).

14. [166]

    Ms Anthony seeks orders, inter alia, that Ms Morton pay to her an amount equal to 15% of all royalties on all sales of the six books for the life of each work; damages for breach of contract; and “equitable damages” for resiling from the Royalties Assumption (as defined at [28] of the further amended statement of claim – see below at [175]).

15. [167]

    Relevantly, the Agency Agreement, as pleaded, is alleged to have been entered into in or about March 2002 and is an agreement pursuant to which it is alleged that Ms Anthony “agreed to act as the defendant’s literary agent and negotiate publishing agreements on behalf of” Ms Morton. The agreement is particularised (at [8] of the further amended statement of claim) as follows (there no longer being an allegation that the agreement was partly in writing):

16. [168]

    At [9]-[12] of the further amended statement of claim, the following are pleaded as express oral terms of the Agency Agreement (in each case the term being particularised by reference to the particulars to [8] (as set out at [167] above):

17. [169]

    Pausing there, by reference to the particulars to [8]: the term alleged at [10] appears to be the mechanical outworking of the statement “I then take 15% commission”; the term at [11], an elaboration of “I remain the Agent of Record”; and the term at [12] is not expressed in the conversation but seems to be a conclusion as to the effect of “I still receive my commission for any contracts negotiated for the life of each work”.

18. [170]

    In the alternative, it is alleged in the further amended statement of claim that the terms pleaded at [9]-[12] were implied terms of the Agency Agreement (see [13] of the further amended statement of claim), such implication being particularised: first, by custom and usage in the book publishing industry (that custom and usage said to be evidenced by, inter alia, a number of publications, including Getting Published for Dummies by LE Kremer and G Green); and, further or in the alternative, by implication in fact by reason of the conduct of the parties alleged at [16]-[20] of the further amended statement of claim (those paragraphs relating to the negotiation of various publishing agreements, the identification of “Selwa Anthony Author Management Agency” on the front page of certain of the publishing agreements or of Ms Anthony or the said Agency in an agency clause in the publishing agreements; and the receipt by Ms Anthony of moneys from the relevant publishers, and the payment by her, after deduction of 15% commission, of the balance of those moneys to Ms Morton).

19. [171]

    At [14] of the further amended statement of claim, a further implied term of the Agency Agreement is pleaded, namely that any publishing agreements negotiated by Ms Anthony on behalf of Ms Morton would include Ms Anthony’s name on the first page and in the agency clause of the publishing agreement. The particulars to [14] aver, first, that the term was implied by custom and usage in the book publishing industry and, second, further or alternatively, that the term was implied in fact by reason of the matters alleged at [17] of the further amended statement of claim (that being the allegation as to the identification of Ms Anthony or the Selwa Anthony Author Management Agency in the various publishing agreements).

20. [172]

    Further or in the alternative to [8]-[14] of the further amended statement of claim, it is alleged (at [15]) that: the Agency Agreement arose by virtue of the conduct of the parties as alleged at [16]-[20]; and that the terms alleged at [9]-[14] are implied into the Agency Agreement by reason of that conduct.

21. [173]

    It is alleged (at [26]) that Ms Morton breached the Agency Agreement by reason of the matters alleged at ([21]-[25]), which include: Ms Morton’s notification that she had appointed a new agent ([21]); the sending by Ms Kremer of her 17 December 2015 email (which the pleading alleges was sent on behalf of Ms Morton and which is described as an offer “to renegotiate the Agency Agreement”) ([22]); and notification by Ms Morton’s solicitor on 25 January 2016 to A&U stating that Ms Anthony was no longer Ms Morton’s agent and that A&U was not authorised to send to Ms Anthony any moneys “due and payable to the Author or Ms Anthony pursuant to Clause 24 of the Publishing Agreements” ([24]). Paragraph 23 takes the matter no further as it is simply a pleading of the fact that Ms Anthony’s solicitor rejected Ms Kremer’s proposal. Paragraph 25 pleads the fact that since 25 January 2016 neither A&U nor any other publisher has paid any money to Ms Anthony “under” cl 24 of the publishing agreements.

22. [174]

    Pausing there, I make three observations. First, the appointment of a new agent could not logically be a breach of an agency agreement a term of which was alleged to be that Ms Morton was free to leave the agency at any time. Second, it is difficult to see how an offer to re-negotiate an agreement (even accepting that the Kremer email could be characterised as such) would of itself amount to breach of the said agreement (i.e., absent conduct amounting to a repudiation of the agreement – no such repudiation was in terms here alleged). Third, as I have already noted, no moneys were ever due and payable under the publishing agreements to Ms Anthony; the Agency Clause simply directed A&U to pay sums due to Ms Morton under the publishing agreements to Ms Anthony as her agent and provided that such payment operated as a discharge of A&U’s payment obligations to Ms Morton.

23. [175]

    From [27]-[31] of the further amended statement of claim an alternative claim based on conventional estoppel is pleaded as follows:

24. [176]

    The Royalties Assumption is particularised by reference to, and thus premised on, acceptance of the alleged oral agreement particularised at [8] or at least the occurrence of the March 2002 conversation allegedly giving rise to that agreement.

25. [177]

    It is alleged that from in or about March 2002 until about 10 December 2015 each of the parties knew or intended that the other act on the basis of the two pleaded assumptions (see [32], particularised by reference to the pleading from [8]-[31]); that a departure from the Royalties Assumption has occasioned and would continue to occasion detriment to Ms Anthony (see [33]; that detriment being particularised by reference to the allegations of loss and damage at [35] and [36]); and hence that Ms Morton is estopped by operation of the doctrine of conventional estoppel from resiling from the Royalties Assumption ([34]).

26. [178]

    In her amended defence filed pursuant to leave granted on 10 August 2018, Ms Morton, inter alia, denies each of the allegations at [8]-[15]; although it should be noted that Ms Morton in her amended statement of cross-claim makes various admissions as to an agency relationship with Ms Anthony – see, for example, at [16]; and as to the formation of a contract of agency – see at [20]ff.

27. [179]

    Pausing here, any perceived discrepancy between the denial of the allegations at [8]-[15] and the admissions as to the existence of an agency relationship or contract of agency is, no doubt, explicable by the fact that the Agency Agreement denied in the amended defence is one alleged to have been entered into in or about March 2002 and containing the terms pleaded at [8]-[14] of the further amended statement of claim; whereas the agency contract pleaded in the amended cross-claim is one alleged to have been formed “from as early as February 2005”, containing the terms pleaded at [21]-[22] of the amended statement of cross-claim, and seems to be one pleaded as arising from the course of conduct between the parties.

28. [180]

    In response to the allegation at [20] of the further amended statement of claim, Ms Morton pleads, inter alia, at [20](c), (to the extent the “Agency Agreement” exists, which is there denied), a denial that Ms Anthony complied with her obligations under it. At [20](d), Ms Morton says further that Ms Anthony has acted negligently and in breach of her fiduciary obligations and contractual obligations (referring to the cross-claim in this regard).

29. [181]

    The amendments made to Ms Morton’s initial defence, by leave granted at the commencement of the hearing, were: first, to plead a set-off in answer to the entire further amended statement of claim (confined, in oral submissions, to be an equitable set-off or a set-off under s 21 of the Civil Procedure Act – contractual set-off being expressly disclaimed – see T 8.45-8.50) ([37]); and, second, the allegation that any entitlement to any commission on the works (which is denied) ceased after 10 December 2015 as a result of one or more of a series of events (variously, the termination or expiry of particular contracts; the entry into new contracts; one of the works in large print now being out of print; and the fact of the assignment of copyright in the works on or about 13 June 2017 to Nightofficer) (see [38]).

30. [182]

    As adverted to in the amended defence, Ms Morton has cross-claimed against Ms Anthony. Leave was granted on 14 March 2018 for the filing of an amended statement of cross-claim, in which Ms Morton claims an account of profits, equitable compensation, and damages; and a declaration that she validly terminated and discharged the “Agency Contract” (i.e., the contract of agency, particularised at [20] of the amended statement of cross-claim, that Ms Morton says was formed from as early as February 2005) with Ms Anthony on 10 December 2015. The causes of action on which Ms Morton relies are negligence, breach of contract and breach of fiduciary obligations by reason of Ms Anthony’s conduct in relation to failures to communicate relevant information and advise Ms Morton in relation to the grant of sole worldwide rights in relation to the “Works”. (Though the “Works” are defined in the pleading as the six books that have been published to date (see at [6]), no claim is now pressed in respect of the grant of worldwide rights for Books 1 and 2 (see T 451.50-452.8).)

31. [183]

    Joined as the second cross-defendant is SAPL, the company through which Ms Anthony alleges (at [7] of the further amended statement of claim) she has traded (as an alternative to her trading under the business name “Selwa Anthony Author Management Agency” as one of the registered proprietors of that name) from on or about 31 May 1994 to the date of filing the pleading. As SAPL was only incorporated in about August 2005, the allegation at [7] of the further amended statement of claim must be understood as being that Ms Anthony traded through the company after its incorporation and before then in her own right under the registered business name. That is made clear by the defence to the statement of cross-claim filed on 31 October 2016 at [3], where Ms Anthony asserts that from about 2005 SAPL was the entity through which she traded. However, as I have noted earlier, SAPL is not named as a plaintiff and does not make any claim for commission in its own right. Ms Morton denies that SAPL became her agent or represented her (see, for example, at [16] of the amended cross-claim).

32. [184]

    At [38] of the amended cross-claim, under the heading “Granting of the sole rights to A&U”, it is alleged that:

33. [185]

    Thus the allegations of breach of fiduciary duties and of breach of contractual and tortious duties of care are all founded on the fact that the A&U publishing agreements contained worldwide rights and the failure of Ms Anthony to communicate all information relevant to the acceptance of those offers (and, in particular, whether those offers were the most advantageous offers reasonably available in the circumstances).

34. [186]

    At [39], [40] and [41], respectively, of the amended cross-claim, are the separate allegations of breach of those various duties (all premised on the conduct alleged at [38] as is clear from the introductory words of those three paragraphs of the pleading). The common complaint made in the particulars to those paragraphs is that Ms Anthony advised Ms Morton exclusively to license her valuable international rights “on uncommercial terms” and that Ms Anthony failed to license the rights on a territory by territory basis (see the particulars to [39]) or a failed to advise as to the alternatives to a world rights publishing agreement or of the number and size of the international commissions that would become payable under world rights publishing agreements with A&U (see the particulars to [40] and [41]).

35. [187]

    Relevantly, it is alleged that under the publishing agreements entered into with A&U, for Books 1-4, A&U was obliged to pay to Ms Morton 80% of the net amounts paid by third parties to it for the sub-licence from A&U for the right to publish the works as a book in the English language overseas and 75% for translation rights (see [30] of the amended statement of cross-claim) and that the respective percentages payable to Ms Morton for Books 5 to 6 increased to 90% both for the English language and translation rights. It is alleged at [31] that a further percentage fee from the income generated from the works has been taken by international sub-agents to make the sub-licence deals. On top of the amounts deducted by A&U, Ms Morton still paid 15% commission on all royalties to Ms Anthony. Hence, Ms Morton’s complaint is that she has paid, in effect, multiple commissions, whereas if the world rights were negotiated territory by territory she would not have done so.

36. [188]

    In the amended cross-claim, Ms Morton also raised claims based on an alleged failure by Ms Anthony to ensure that she received moneys due to her promptly and to account properly in respect of moneys due and payable to her (see [42]-[48]); and as to alleged retention of 15% of the withholding tax credit remitted by A&U to Ms Morton and failure to account for the whole of the post termination amounts received by Ms Anthony from A&U (see [52]-[57] and the particulars to [41]) but those claims were not pressed at the hearing.

37. [189]

    In their defence to the amended statement of cross-claim, Ms Anthony and SAPL: admit that certain of the terms pleaded at [21] were implied as a matter of law in the Agency Agreement (terms (c), (d) and (e) – relevantly including the duty of due care and skill and the duty to act for the benefit and foster the best interests of Ms Morton); deny that term (b) was implied (the duty to collect and keep any moneys received in a separate account); and otherwise do not admit the alleged terms (see below) ([21]); admit that the Agency Agreement was terminable at will but say it was an express term “that Ms Morton’s obligation under the Agency Agreement to pay Ms Anthony or SAPL 15% commission on all monies earned by Ms Morton for each of the Works would continue after termination” ([22]); say that Ms Morton, by her conduct, accepted that the agency agreement was with SAPL [I assume in context that this is only from February 2005] and that Ms Morton is now estopped from denying that she had a contractual relationship with SAPL ([24](d)); admit the allegations made as to the fiduciary duties owed to Ms Morton and as to the existence of a duty of care to perform the obligations as an agent with due skill, care and diligence (see [25]; [26(a)]) but deny the allegations of breach of those duties ([38]-[41]).

38. [190]

    The terms that Ms Anthony does not admit were implied as a matter of law in the Agency Agreement are: (a) that she would and had a duty to negotiate contractual terms for and on behalf of Ms Morton on the most favourable terms available to Ms Morton; (f) that she would communicate with Ms Morton information material to the agency, including the nature of the transactions and the alternatives; and (g) that the Agency Contract was personal and Ms Anthony could not delegate her authority as agent.

39. [191]

    In answer to [16] of the cross-claim, the cross-defendants allege that: Ms Anthony acted as Ms Morton’s exclusive agent with respect to each of the “Works”, negotiated contracts for each of the Works, managed the rights to each of the Works and represented Ms Morton’s interests in each of the Works; that Ms Anthony acted as Ms Morton’s exclusive agent and represented her “since in or about March 2002” “pursuant to the Agency Agreement”; that from about 24 August 2005 or at least from October 2005, SAPL conducted the business of Selwa Anthony Author Management Agency; and that Ms Morton considered Ms Anthony to be her agent from 1999. It is alleged that when SAPL commenced to operate the business of Selwa Anthony Author Management Agency in or about 24 August 2005, Ms Morton by her conduct accepted that the Agency Agreement was then with Ms Anthony’s company (see at [20](d); and see also the estoppel alleged at [24](d)).

40. [192]

    In further answer to the whole of the statement of cross-claim, Ms Anthony says (at [59]) that:

41. [193]

    Finally, in terms of the pleadings, in her reply to the defence to the statement of cross-claim filed 23 March 2018, Ms Morton, in answer to the defence pleaded at [59](c), contends that Ms Anthony, and/or SAPL acting through Ms Anthony, engaged in an act of concealment within the meaning of s 55(1)(b) of the Limitation Act 1969 (NSW): in essence, the allegation is that in or around May 2010, Ms Anthony knowingly misrepresented that she had “fixed things” so that Ms Morton was now paying 10% commission to A&U and 25% commission in total (see [1]) and that Ms Morton only discovered that she was still paying three full commissions, contrary to Ms Anthony’s representation of May 2010, in or around November 2015 ([2]); such that the claims are not time-barred.

42. [194]

    In the alternative, or additionally, it is alleged that the loss and damage to Ms Morton’s interest as the owner of the copyright at the relevant time, which she suffered as a result of the alleged breaches of duty did not occur until the advances paid under the international sub-licence agreements were “earned out” (until which point the loss had not crystallised) (see [5]). However, that alternative or additional argument was not pressed at the hearing.

Issues

1. [195]

   On Ms Anthony’s claim, the following issues thus arise:

   1. (1)

      Was there a binding oral agency agreement entered into in or about March 2002 between Ms Anthony and Ms Morton?

   2. (2)

      If so, what were the terms of the said agreement; and, in particular, do they entitle Ms Anthony to receive a 15% share of commission in respect of royalties earned on the sales of Books 1 to 6 after termination of the agency agreement and/or after appointment of a new agent and the termination of the A&U publishing agreements?

   3. (3)

      If the answer to 1 is in the affirmative, did Ms Morton validly terminate the said agreement?

   4. (4)

      In the alternative to the above, is Ms Morton now estopped (under the doctrine of conventional estoppel) from resiling from the alleged Royalties Assumption (see [175] above)?

   5. (5)

      If either Ms Anthony’s claim for breach of contract or her claim based on conventional estoppel succeeds, what relief should be granted?

2. [196]

   Issue 2 involves consideration of the various bases on which it is alleged that the terms contended for formed part of the alleged oral agency agreement: namely, were they express terms that were orally agreed between the parties at the relevant time (pleaded as in or about March 2002) or were they terms to be implied into the agreement (whether by custom or usage in the book publishing industry; as a matter of fact; or by reason of the parties’ conduct).

3. [197]

   On Ms Morton’s cross-claim, as pressed at the hearing, the following issues arise (it being admitted by Ms Anthony that she owed Ms Morton fiduciary duties and a duty, both contractual and under the law of tort, of care and skill):

   1. (1)

      Was there a breach of fiduciary obligations owed to Ms Morton by Ms Anthony’s conduct in relation to the inclusion of “world rights” in the A&U publishing agreements for Books 3 to 6, or alternatively, Books 5 to 6?

   2. (2)

      Was there a breach of a contractual or tortious duty of care in relation to the inclusion of the “world rights” in one or more of those publishing agreements?

   3. (3)

      If the answer to one or both of the above is in the affirmative, is Ms Morton’s claim statute-barred or otherwise defeated by laches, acquiescence or delay?

   4. (4)

      Has Ms Morton failed to mitigate her loss?

   5. (5)

      If Ms Morton’s cross-claim succeeds, what relief should be granted?

   6. (6)

      Should any amounts payable to Ms Anthony be set-off against amounts payable by Ms Morton?

Evidence

1. [198]

   Ms Anthony has made a number of affidavits deposing to her dealings with Ms Morton over the years and relies upon affidavit evidence from her husband (Mr Dennis) and daughter (Ms Linda Anthony), her personal assistant (Ms Selena Hanet-Hutchins), and various of her client authors. Most of the evidence from lay witnesses was relied upon as going to Ms Anthony’s business practice or was sought to be admitted as tendency or coincidence evidence. Objection was raised to the admissibility of much of that evidence.

2. [199]

   As to the evidence sought to be relied on as tendency or coincidence evidence, by letters dated 2 July 2018 notice was given by Ms Anthony, pursuant to ss 97 and 98 of the Evidence Act 1995 (NSW), respectively, of her intention to adduce tendency and coincidence evidence.

3. [200]

   The tendency sought to be proved was Ms Anthony’s tendency to act in the following way:

4. [201]

   In very similar terms, the coincidence notice referred to evidence of two or more events (said to prove, because of the improbability of the events occurring coincidentally, that Ms Anthony did a particular act – namely, entered into an Agency Agreement with Ms Morton on the terms set out below in 2002), namely:

5. [202]

   The authors specified in the coincidence notice (each of whom signed affidavits that were filed in the proceedings) and the approximate dates on which they entered into the respective Agency Agreements with Ms Anthony are as follows: Ms Kim Wilkins (in 1997); Dr Karen Brooks (in 2006); Ms Juanita Phillips (in 2008); Ms Diane Armstrong (in 1996); Ms Gail Bell (in 2001); Ms Anna Romer (in 2002), Ms Margaret Groff (in 1998); Ms Sue Williams (in 1990); Mr James Thomson (in 1990); Ms Karen Davis (in 2007); Ms Kristin Brooks (in 2012); and Ms Morton (in 2002).

6. [203]

   Ms Morton gave evidence in her defence and going to her cross claim.

7. [204]

   Evidence was called by both sides from other literary agents and from publishers in the industry (some of which was adduced as expert evidence). There was also evidence from forensic accountants as to the quantification of damages on Ms Anthony’s claim and Ms Morton’s cross-claim.

Submissions as to credibility of principal witnesses (Ms Anthony and Ms Morton)

1. [205]

   Ms Morton submits that the Court should not believe any evidence given by Ms Anthony without documentary corroboration for two reasons.

2. [206]

   First, because, despite verifying particulars and swearing affidavits setting out actual conversations, Ms Anthony admitted in cross-examination that she had no actual or independent recollection of any conversation with Ms Morton in March 2002, or at any time, about any alleged right to ongoing commission after termination (see T 141.3-15; T 143.5-15). In this context, it is noted that Ms Anthony’s verified pleading recounts a conversation using a phrase (”agent on the record”) (see [153] above) which Ms Anthony said she did not use or even know in the first half of 2002 (see T 144.15-40).

3. [207]

   Second, because it is submitted that Ms Anthony either had no explanation (see T 123.21-26; T 124.46-T 125.23; T 127.3-24; T 137.19-22) or no rational explanation for not telling anyone about the alleged oral agreement in the period from 21 December 2015 (when her solicitor first corresponded in relation to the matter) until 20 May 2016 (being the date of filing of the statement of claim), during which time her solicitor was writing to A&U and Ms Morton’s solicitor asserting an entitlement to ongoing commission after termination of the agency. It is submitted that the only credible explanation, consistent with her lack of independent recollection of the alleged conversation itself, is that Ms Anthony invented the oral contract claim.

4. [208]

   Ms Morton also lists in her submissions a number of key concessions said to have been made by Ms Anthony in her cross-examination on the alleged agency agreement and her on-going silence in the six months leading up to her verifying the statement of claim in support of the above submissions (see closing submissions at [12]-[36]). I deal with that evidence in due course when addressing what I have identified as Issue 1 on Ms Anthony’s claim.

5. [209]

   For Ms Anthony, it is submitted that she was clearly doing her best to give a truthful and accurate recollection of events and conversations to the best of her abilities; and it is submitted that she was unshaken under cross-examination as to the express terms of the agency agreement as stated to Ms Morton “despite being under considerable pressure during that cross-examination”. Ms Anthony says her evidence should be accepted as to: the existence of an oral agency agreement between herself and Ms Morton; when the contract of agency was formed between herself and Ms Morton; and the terms of that contract. Ms Anthony says that where there is a conflict between her evidence and that of Ms Morton as to the terms of their agency contract her evidence should be preferred.

6. [210]

   It is submitted that Ms Anthony’s explanation for the discrepancy between the phrase “agent on the record” or “Agent of Record” which appears in the verified pleading and her affidavit account of the March 2002 conversation is both candid and plausible. That explanation is that she considered the term “agent on the record” to be the same conceptually as a term that she would “remain the agent for the life of the work”.

7. [211]

   It is further submitted that Ms Anthony’s explanation for errors in pre-trial correspondence from her solicitor to Ms Morton’s solicitor (as to the basis of her claimed entitlement), namely, that it was a result of Ms Anthony and her solicitor being at cross-purposes at an early stage of the proceedings, should be accepted. (I note that there is no evidence from Ms Anthony’s solicitor in support of that submission – though see the submissions on adverse inferences that might be drawn below.)

8. [212]

   Ms Anthony submits that aspects of Ms Morton’s evidence in cross-examination reflect poorly on her credit as a witness: arguing that, although the existence of the agency agreement was ultimately not disputed by Ms Morton in cross-examination, Ms Morton appeared to be initially reluctant to admit to the extent and terms of the relationship.

9. [213]

   Ms Anthony characterises Ms Morton’s dispute as to Ms Wilkins’ evidence of discussions about Ms Anthony’s rate of commission as “somewhat disingenuous”, referring to: Ms Morton’s evidence that she had acquired knowledge of Ms Anthony’s 15% rate of commission “osmotically”, through the spoken word or “observation”; her concession that Ms Wilkins might have said “Selwa - agents take 15% but they get you that much more in your advance, so they pay for themself [sic]” (T 225.25); and her evidence as to the first discussion of commission with Ms Anthony being in 2005 in the terms to which she deposed.

10. [214]

    Ms Morton submits that her evidence should be accepted. It is submitted that Ms Morton was cross-examined extensively on the alleged oral agreement to pay ongoing commission after termination of the agency and that she gave consistent and credible evidence that no conversation in those terms occurred.

11. [215]

    I make no adverse credit findings as to the principal witnesses I considered that both Ms Anthony and Ms Morton were genuinely endeavouring to give their honest recollection of events going back as far as 2000. Ms Anthony’s frank concession as to the difficulty in recalling conversations (and that the years were “shaky”) was well-made, although she did not “really agree” that she had no recollection of talking to Ms Morton in March 2002 (see T 155). The difficulty for witnesses in this regard is well-known (see Watson v Foxman (1995) 49 NSWLR 315).

12. [216]

    I consider in due course their evidence as to the critical events. Suffice it for the present simply to note that I considered Ms Anthony’s recollection of the timing of various events to be unreliable and I formed the view that her understanding of legal concepts relevant to the arrangements entered into between authors, agents and publishers respectively was not well-informed.

13. [217]

    So, for example, in cross-examination, Ms Anthony denied (much to my surprise given that she is here suing on an alleged binding oral agreement) a series of propositions as to her understanding that an express agreement made in a conversation between an agent and an author and not written down was legally enforceable; maintained that there was a distinction between an oral agreement and an oral contract; and was inconsistent as to whether she had regarded herself as a party to the respective publishing agreements. See, for example, the following exchanges:

14. [218]

    And (at T 104.48ff):

15. [219]

    As to whether Ms Anthony thought herself to be a party to the publishing agreements, the following exchange took place, commencing at T 109.39 by reference to cl 24 (the Agency Clause) of the A&U publishing agreements:

16. [220]

    Ms Anthony gave similar evidence in relation to the audio recording agreement with Bolinda (see T 111.21ff) and the agreement with Center Point (see T 112.40ff). Her explanation (at T 111.50) as to why she did not try to sign the authors’ contracts was because “that’s not how it works in publishing”.

17. [221]

    In an exchange from T 129.20, Ms Anthony drew a distinction between oral agreements (which she said literary agents have with authors) and contracts (which she said publishers had with authors):

18. [222]

    At T 131.40ff there was the following:

19. [223]

    The confusion of thought apparent in the above passages makes it difficult to place any weight on the adamant way in which Ms Anthony maintained in cross-examination that there was an express oral agreement as to her agency relationship with Ms Morton (or at least as to its precise terms). The fact that she was “unshaken” on that assertion is not to the point. I accept that this is her genuine belief. The difficulty is how she arrived at that belief. Most likely, it seems to me (and this accords with her evidence in cross-examination – see, for example, T 140.50; T 141.5-15), this is her belief based on an assumption that in her dealings with Ms Morton she followed her usual (though the evidence does not suggest it was uniform) practice (those being the type of words she says “like a parrot” to all her authors; not on a reliable recollection of any particular conversation or series of conversations. Moreover, it encompasses an unreliable assumption as to the legal effect of her “usual” practice.

20. [224]

    Ms Morton, on the other hand, gave a more reliable (and far more plausible) account of the time at which, and manner in which, the agency relationship with Ms Anthony arose. I accept that there were aspects of Ms Morton’s recollection of the timing of events that were incorrect or seemed to be inconsistent with other events (as I have noted when going throughout the chronology of events in the “Background” section of these reasons). However, my impression, fortified by a close review of all of the evidence, is that those instances were less common than the corresponding instances in Ms Anthony’s evidence.

21. [225]

    Contrary to the submissions made for Ms Anthony, I did not consider Ms Morton’s evidence to be disingenuous or self-serving. Rather, I formed the view that in cross-examination Ms Morton was listening carefully and seeking to understand precisely the questions she was being asked and focussing her answers with precision on those questions (see for example, and without intending to be exhaustive, T 211.39-211.48; T 218. 15; T 218.45; 220.21; T 220.48 T 223.7; 224.5-224.27; T 246.5; T 254.33; T 264.14; T 268.23). She was (unsurprisingly given her academic background and her profession as a writer) very articulate and her use of language (such as her description of knowledge being acquired “osmotically” (T 225.1) or her finding an experience “discombobulating” (T 219.26)) struck me not as disingenuous (as Ms Anthony submitted) but as that of someone with a literary bent. Ms Morton’s explanation of her reference in an interview to Ms Anthony having been her agent since about 1999 as “retrospectively” correct, I would characterise in similar fashion. As Ms Morton’s answers in cross-examination seemed to me to make clear, she was drawing a distinction between an agent being someone to whom she could submit her work and an agency agreement as such.

Determination of issues on Ms Anthony’s claim

1. [226]

   As Ms Anthony’s claim turns largely, if not wholly, on acceptance of her evidence as to the alleged March 2002 conversation with Ms Morton, it is convenient first to set out her evidence on that topic. I have already set out what was first particularised in that regard (at [123] above) and what was ultimately particularised in that regard (at [153] above).

2. [227]

   At [20] of Ms Anthony’s first affidavit, Ms Anthony deposes to the conversation as being a telephone conversation and taking place in or about March 2002 in words to the following effect:

3. [228]

   It is to be noted that in this first affidavit there is no reference to Ms Anthony remaining as “the Agent of Record” (cf. the conversation as set out in the particulars to [8] of the final version of the further amended statement of claim). That is not surprising given that Ms Anthony’s evidence is that she had not heard that term back in 2002 but it does sit somewhat uncomfortably with her verification of the further amended statement of claim (that said, the particularised conversation is stated to be in “words to the following effect” and I accept that remaining the Agent of Record may be said to be the effect of the statement that “the terms of the Agency Agreement remain in place”).

4. [229]

   Similarly, there is no reference, as such, in the conversation to which Ms Anthony deposed in her first affidavit to the statement that “I still receive my commission for any contracts negotiated for the life of each work” (cf. the particulars to [8]), although the conversation to which Ms Anthony deposes does include reference to commission on “all monies you earn from that contract and any further contracts for the life of the work”.

5. [230]

   It is also to be noted that the way in which the commission is there expressed (at [20] of Ms Anthony’s first affidavit) is that it is on all moneys Ms Morton earns “from that contract and any further contracts for the life of the work” (my emphasis); thus squarely linking commission to royalties earned “from” the publishing agreement(s), but also leaving open the possibility that Ms Anthony was contemplating an entitlement to commission on moneys earned from any further contracts even though those might be contracts in the negotiation of which she had no involvement (such as a different publishing agreement entered into after termination of the agency relationship), something that I did not understand to be the case maintained by Ms Anthony at the hearing.

6. [231]

   There is also no reference in the first affidavit version of the alleged March 2002 conversation to any explanation of the nature of an advance (of the kind that Ms Anthony says in her second affidavit that she said “to all of my authors, including Ms Morton” – see [2](34)); nor any explanation of how “royalties beyond the advance were earned and paid to authors” (cf. [2](38) of her second affidavit – though in fairness to Ms Anthony that seems to be a reference to an explanation said to have been given at the time of the initial publishing agreement in 2005).

7. [232]

   Finally, I note in considering the conversation described at [20] of Ms Anthony’s first affidavit that there is a seeming inconsistency between the freedom to terminate the relationship with the agency and the terms of the Agency Agreement remaining in place (to which Senior Counsel for Ms Morton pointed in his submissions) but it may be that what was contemplated was that particular contractual terms were to survive termination of the agency agreement (akin to the situation where a confidentiality obligation may be expressed to survive after termination of the relevant contract) or, perhaps, that a distinction was being drawn between the agency relationship and an agency agreement (akin to the recognised distinction between an employment relationship and an employment agreement – the latter being capable of subsisting even after termination of the former – see Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32 at [3] (French CJ, Bell and Keane JJ); Visscher v Giudice (2009) 239 CLR 361 at 379-381; [2009] HCA 34)). However, I find it difficult to accept that Ms Anthony had actually turned her mind to such complexities at the time the agency relationship commenced (having regard to her evidence in cross-examination in relation to legal concepts to which I have referred above) and, in any event, what this raises is the uncertainty surrounding precisely what the terms of the agency arrangement (to use a neutral term) were mutually intended and agreed to be.

8. [233]

   In her second affidavit (denying that she had ever said words to Ms Morton to the effect of “Did Kim tell you that I take 15%?”, as Ms Morton contends she did) Ms Anthony deposes (at [2](33)) that in a telephone conversation in or about March 2002 she said to Ms Morton “among other things”:

9. [234]

   In that affidavit Ms Anthony asserts (at [2](35)) that she and Ms Morton “entered into a contract with each other in or about March 2002 having agreed upon the terms of engagement”. (Even on Ms Anthony’s account, the notion that there had been agreement on the “terms of engagement” as those terms were ultimately pleaded by her is difficult to accept, having regard to the limited content of the conversation to which she has deposed.)

10. [235]

    At [2](36), Ms Anthony asserts that it was agreed with Ms Morton that if she wished to terminate her relationship with Ms Anthony’s agency she was free to do so and free to appoint a new agent; and she goes on to assert (in general terms by reference to “an author”, not to Ms Morton as such) that “they are free to go but I continue to be entitled to be paid a commission on royalties for the life of the work”.

11. [236]

    In her third affidavit, Ms Anthony for the first time places the conversation in relation to her commission as occurring in a series of conversations earlier than in or around March 2002. At [20] of that affidavit, she deposes that:

12. [237]

    At [32] of that affidavit Ms Anthony again asserts that she and Ms Morton entered into a contract in or about March 2002 having agreed upon the terms of engagement. At [31], she sets out what she says she said to Ms Morton explaining how royalties worked (but without ascribing a date to that conversation).

13. [238]

    In oral evidence in chief (given by leave due to the conclusory form in which much of her affidavit evidence was couched – such as “I explained that …”), Ms Anthony was invited to give evidence as to what she recalls having said on various topics. She had difficulty (not uncommon for a lay witness) putting this in direct speech. On numerous occasions she expressed her evidence in the conditional tense, in terms such as “would have said” or “would have been”. It was apparent that this evidence was based, to a large extent, on what Ms Anthony says is her usual practice with her client authors (see for example – T 88.49; T 90.18; T 91.3; T 91.37; T 93.44.; T 98.5ff; T 101.11: T 101.30). She was, however, adamant that there was an oral arrangement under which she was entitled to 15% commission for the life of the works in respect of which she had negotiated publishing contracts.

14. [239]

    It is clear from the cross-examination to which I have earlier referred that Ms Anthony understood that her entitlement to ongoing commission derived from the Agency Clause contained in the publishing agreements (and thought that she was a party to those agreements or otherwise entitled to enforce the payment by publishers of the author’s royalties direct to her by reference to that clause), not from any agency agreement as such.

15. [240]

    Ms Anthony’s subjective belief or understanding as to the import of the publishing agreements she had negotiated (or, for that matter, the agency Clauses contained therein) is of course not determinative of whether there was an oral agreement between her and Ms Morton to the effect of that for which she contends. However, it is instructive in at least two respects.

16. [241]

    First, it is difficult not to conclude that any explanation she might have given to Ms Morton in 2002 (or later) as to the basis on which Ms Anthony was to be entitled to commission (and, in particular, as to whether and how she was to be entitled to commission after termination of either the agency relationship or the publishing agreements) would in all likelihood have been similarly confused. Second, and more significantly, the emphasis that Ms Anthony clearly placed on the Agency Clause (and the protection it conferred on her) makes it implausible that Ms Anthony was focussing in any of the alleged conversations with Ms Morton on the terms of an oral agreement with Ms Morton as the bases for her entitlement to the payment of ongoing commission (after termination of either the agency relationship or the publishing agreement(s)) rather than proceeding on the assumption that the publishing agreements “protected” her.

17. [242]

    Further, Ms Anthony’s assertion that Ms Morton understood any explanation given to her appears to be based on no more than the fact that Ms Morton agreed to sign the publishing agreements.

18. [243]

    Leaving aside the question of any implied term in the publishing agreements to the effect for which Ms Anthony contends, the proposition that Ms Anthony was a party to the publishing agreements entered into by Ms Morton with the respective publishers is untenable. She is not named as a party to any of them and she did not sign any of them. The fact that there is the Agency Clause, by which Ms Morton authorises Ms Anthony or her agency to collect the royalties and directs the publisher to pay the royalties to her agent does not render Ms Anthony a party to the contracts. Nor was it suggested that this was a case where the benefit of a contractual promise was held on trust for her (see Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107; [1988] HCA 44) or that clause 24 otherwise effected a legal or equitable assignment. A mere mandate from a principal to his or her agent gives no right or interest in the subject of the mandate (see Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 at 620; 622-623; [1936] HCA 12).

19. [244]

    The direction to A&U was not in terms expressed to be irrevocable (and, even if it had been, there is nothing to suggest that, as between the publisher and Ms Morton, they could not have agreed to a variation of the direction given by that clause – as A&U’s solicitors intimated in their correspondence with Ms Anthony’s solicitor in 2016). The suggestion put to A&U by Ms Anthony’s solicitor that A&U had a contractual obligation to Ms Anthony to pay the royalties to her was untenable and was correctly rejected by A&U’s lawyers for the reasons given in their correspondence. The suggestion that it was not open to Ms Morton unilaterally to vary the direction contained in cl 24 misconceives the effect of cl 24.

20. [245]

    That Ms Anthony may have conducted her agency relationships with other authors on the basis of a misunderstanding of the effect of the Agency Clause and considered herself protected by that clause (T 131.44) (or may have been misled by some unknown person or persons – see T 131.36), as was the tenor of her evidence in cross-examination, is unfortunate but not to the point.

21. [246]

    Coming back to the evidence on which Ms Anthony relies for the allegation that there was an oral agreement containing the terms alleged (and, in particular, the ongoing commission), Ms Anthony also calls in aid evidence from others of her business practice. The evidence of her daughter, Ms Linda Anthony, and of her assistant, Ms Selena Hanet-Hutchins, who worked in the agency at relevant times (including 2002), is relied upon by Ms Anthony as evidence of a system and business practice that Ms Anthony had in place before during and after 2002 of entering into oral contracts with authors who engaged her as a literary agent in identical terms to that which Ms Anthony claims she entered into with Ms Morton in about March 2002. The evidence of the other witnesses who were clients of Ms Anthony’s agency and who it is submitted also entered identical contracts with Ms Anthony during years before, including and after 2002, is said also to evidence that system and business practice.

22. [247]

    Ms Anthony argues that this evidence is relied upon principally as being capable of establishing that she had set in place a system which, if implemented in her interactions with Ms Morton, would have resulted in a contract being made between them with the ongoing commission term (being “business system” or “practice” evidence in accordance with the principles articulated in Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51; [2000] FCA 1886 at [67] per Sackville J, sitting in the Federal Court as his Honour then was (Jacara)). Alternatively (and as a fallback), this evidence is sought to be admitted as evidence of a tendency which Ms Anthony had to act in a particular way (in which case it is contended that the requirements of s 97(1) of the Evidence Act have been met).

23. [248]

    Before turning to the objections raised to the admissibility of that evidence (which I only provisionally read at the time of the hearing, indicating that I would rule on its admissibility in my final judgment), I summarise below the relevant evidence (and I note that some of this evidence was in any event only able to be read as going to the witness’ understanding of that witness’ contractual arrangements and/or subject to relevance – see the transcript for the rulings to that effect).

24. [249]

    The evidence of Ms Anthony, Ms Wilkins, Ms Lyn Tranter (a literary agent) and Ms Shona Martyn (a publisher) is relied upon as evidence of industry practice consistent with contracts of agency “routinely” being entered into between literary agents and authors “in identical terms” to that which Ms Anthony claims she entered into with Ms Morton in about March 2002, “and with that contract being consistent with the industry norm”.

25. [250]

    First, as to those who worked in Ms Anthony’s agency: her daughter, Linda, and Ms Selena Hanet-Hutchins.

26. [251]

    Ms Linda Anthony, a literary assistant employed full time in her mother’s “Literary Management Agency”, swore an affidavit on 22 December 2016. Her recollection is that Ms Morton first attended the “Sassy Awards” with Ms Wilkins in 1998 or 1999 ([3]; [5]) (cf. the evidence of Ms Wilkins and Ms Morton which place the first such occasion in 2000); and again in 2001 ([10]).

27. [252]

    Linda deposes (at [27]-[28]) that ever since she has been a teenager she has heard her mother “have the same conversation with new authors repeatedly” and that she has observed that:

28. [253]

    Pausing there, in relation to telephone conversations (unless they were on speaker phone) it is difficult to see how Linda Anthony could have heard a question posed to her mother by an author. She goes on to depose (at [30]) that:

29. [254]

    It is relevant to note from the above: first, that the reference to the Agency Clause is consistent with Ms Anthony’s belief that this was her protection and the basis of her entitlement to receive royalties from the publishers; second, it seems that on this version of the conversation the ongoing commission is limited to the time the publishing agreements are on foot (for the life of the work “under those agreements”); and, third, since Ms Anthony’s evidence is that she had not heard the expression “agent on the record” back in 2002, that cannot have formed part of what Linda heard her say “repeatedly” to new authors at that time. Ms Linda Anthony does not depose to overhearing or being present at any particular conversation between her mother and Ms Morton in March 2002.

30. [255]

    Ms Hanet-Hutchins is an author and freelance editor. She has affirmed an affidavit on 5 September 2017 in which she deposes that she worked for Ms Anthony and her author management agency, Selwa Anthony Author Management Agency, from 2003 until 2010 (first as an agency assistant, then as an agency editor and sub-agent, and later “at large”) ([2]-[3]). She now runs her own “broad-scope freelance editing business”. From 2005 to 2007 she also worked at A&U.

31. [256]

    Ms Hanet-Hutchins deposes that Ms Anthony did not personally write emails and that she, Ms Hanet-Hutchins, would type up and send emails (dictated to her or handwritten by Ms Anthony), in which capacity she was involved in email exchanges between Ms Anthony and A&U when Ms Anthony first negotiated an agreement with A&U for Ms Morton’s first two books and in 2007-2008 (see [9]). Ms Hanet-Hutchins deposes to having read the manuscript for “The Shifting Fog” and to having made suggestions to Ms Anthony that Ms Barlow would like it (see [11]-[12]) but does not identify the time at which she first saw or read the manuscript.

32. [257]

    Ms Hanet-Hutchins deposes at ([31] to hearing the following kind of conversation (see at [28]-[30]) “every time Selwa was talking to a new author for the first time”:

33. [258]

    Ms Hanet-Hutchins also deposes that on several occasions she heard Ms Anthony explain to “new” authors who were changing from other agents that she could not help the previously published author with publishers regarding an earlier book contract “because the book was represented by a different agent and the book would remain with them until the publisher returned rights for the work to the author” ([31]).

34. [259]

    Ms Hanet-Hutchins deposes that Ms Anthony agreed to act as her literary agent for the two books she had written (see [40]).

35. [260]

    At [41], Ms Hanet-Hutchins sets out her understanding, based on her experience in the Australian publishing industry, of the contractual process and, inter alia, the effect of the “agent’s clause” that is included in the publisher’s contract. I do not set that out here. Ms Hanet-Hutchins was not qualified as an expert for the purposes of giving evidence in these proceedings. Suffice it to note that she asserts that in her experience a 15% commission is standard (that being a matter about which there is no complaint by Ms Morton) and that the commission “applies to proceeds of the book for the life of the book”. She also asserts that it is common for sole-operator literary agents to use a verbal agreement or “handshake” and asserts (though on a basis not identified in her affidavit) that Ms Anthony had such a verbal agreement with Ms Morton (see [42]-[43]).

36. [261]

    Relevantly, for present purposes, what is said (at [28]-[29] of Ms Hanet-Hutchins’ affidavit) is consistent with the proposition that the Agency Clause evidences that Ms Anthony is the author’s agent. It takes the matter no further. What is said at [30] of that affidavit leaves unclear what is meant by Ms Anthony “always” being the agent “for the life of that book”, particularly when juxtaposed with the notion that the author could leave the agency and get a new agent any time he or she liked. It does not address the position if the publishing agreement that had been negotiated by Ms Anthony for the particular book were to be terminated. The fact that it is common for literary agents to use verbal agreement is irrelevant. Here, the question is whether, in this particular instance, there was an oral agreement between Ms Morton and Ms Anthony; and, critically, if so, what were its terms.

37. [262]

    Mr Thomson, an author and journalist, has affirmed an affidavit on an unidentified date in September 2017, deposing that Ms Anthony was his literary agent for about 27 years (until he changed agent about two years before his affidavit was affirmed). He deposes that he has never had a written contract with Ms Anthony, only with the publishers.

38. [263]

    Mr Thomson deposes that with his first book, he approached Ms Anthony and there was a conversation in which he asked her to be his agent; she agreed; and he asked what did she get, to which she said:

39. [264]

    He still receives royalties from Ms Anthony in respect of the books that were published when she was his literary agent. That may well be the case, but the conversation to which he deposes does not make clear that there was to be ongoing entitlement to commission after termination of the agency relationship.

40. [265]

    Ms Williams is an author and journalist; and married to Mr Thomson. She has affirmed an affidavit on an unidentified date in September 2017, deposing to the fact that, until approximately eight months before her affidavit was affirmed, Ms Anthony was her agent. She has deposed to a conversation with Ms Anthony in 1990 which included words to the following effect (at [9]):

41. [266]

    Ms Williams deposes that she still receives royalties for the books she wrote while Ms Anthony was her agent, after Ms Anthony has deducted 15% for her commission (from which I infer that the rate of commission changed at some time during the period that Ms Anthony was her agent) (see [12]). She does not depose to Ms Anthony giving any explanation as to what was meant by “for the life of the works” or how that was to operate in practice.

42. [267]

    Ms Armstrong, an author and client of Ms Anthony’s author management agency since 1996 has deposed in her affidavit affirmed 6 September 2017 (at [4]) to entering into an oral contract with Ms Anthony, as follows:

43. [268]

    Ms Wilkins has made three affidavits in these proceedings: the first, sworn 15 December 2016; the second, affirmed 27 September 2017; and the third affirmed “August 2017”. She is an academic and author (and, as already noted, was a friend of Ms Morton’s at around the time that Ms Morton was first introduced to Ms Anthony). Ms Wilkins has been a client of Ms Anthony’s literary agency for twenty years.

44. [269]

    Ms Wilkins deposed in her first affidavit (at [11]) to her awareness of her own arrangements with Ms Anthony, namely that:

45. [270]

    At [13] Ms Wilkins deposes that she personally knows “many other [unidentified] successful Australian writers”, many of whom use agents other than Ms Anthony and that “many of them have verbal agreements with those agents and agent clauses in their contracts”. She asserts that it is a “standard industry practice”.

46. [271]

    In her second affidavit (at [6]) she repeats the understanding set out at [11] of her first affidavit of her arrangements with Ms Anthony. At [5], she asserts that “[m]y contract with Selwa is an oral one”.

47. [272]

    At [15] in her second affidavit, Ms Wilkins deposes to a conversation (part of which was the subject of the provisional ruling as evidence of the witness’ understanding of Ms Anthony’s practice; and subject to relevance and weight) with Ms Morton (which she places as being at some time after February 2000 when Ms Anthony was not present – see her third affidavit at [6]), to the effect:

48. [273]

    At [16] of that affidavit, she deposes to another conversation with Ms Morton (at which Ms Anthony was again not present) in about 2005, when she became aware that Ms Morton had been offered a publishing contract, in which she says that Ms Morton asked her “So Selwa will get the money and send it to me?” and that she responded:

49. [274]

    At [20], she refers to another conversation with Ms Morton (which must have been after “The Shifting Fog” had been selected for the Richard and Judy Show in the UK) in which, among other things, she says she said to Ms Morton:

50. [275]

    The circumstances in which Ms Wilkins was suddenly prompted (on her account) to raise this with Ms Morton were not explored.

51. [276]

    At [33], responding to Ms Morton’s denial (at [161] of her first affidavit) that the two had ever had a conversation where Ms Wilkins advised her that there would be no written agreement, that Ms Anthony would be entitled to 15% of all publishing works, that Ms Morton would be free to leave Ms Anthony’s agency but Ms Anthony would still be entitled to 15% commission for the life of each work, Ms Wilkins asserts that she did tell Ms Morton each of those things.

52. [277]

    At [35] (and in her third affidavit at [5]) Ms Wilkins asserts that she told Ms Morton words to the effect “Selwa’s agency agreement is for the life of the book and she will receive 15% for the life of the book”. She maintains (see [47] of her second affidavit and to similar effect the assertion at [49] of that affidavit) that she told Ms Morton “many times” words to the effect “Your agent is entitled to commission for the life of the book even if you terminate their agency agreement”. Again, it is not explained why Ms Wilkins would have felt the need to tell Ms Morton this “many times”.

53. [278]

    Ms Groff, a registered nurse, columnist and non-fiction writer, has affirmed an affidavit on 12 September 2017 in which she deposes that she became a client of the Selwa Anthony Author Management Agency in July 1998. She deposes that Ms Anthony called her (after a radio interview with Ms Groff had been broadcast) and said to her words to the effect “I am an Australian literary agent. I represent Australian authors to find a publisher for their work” ([5]). Ms Groff, who deposes (at [24]) that her contract “with Selwa and her agency” is oral, says (at [8]) that:

54. [279]

    She deposes at [28] that:

55. [280]

    Ms Groff deposes at [36] that from the beginning (1998) she was advised by Ms Anthony that the agency would take 15% commission on all publishing contracts negotiated for a specific copyright work and that she verbally agreed to that.

56. [281]

    The arrangements to which Ms Groff deposes do not mirror Ms Anthony’s account of the orally agreed terms with Ms Morton: in that, for example, audio and TV rights were expressly excluded from the Ms Morton’s publishing agreements. More relevantly, the terms deposed to at [28] on the one hand and [36] on the other seem to be inconsistent: in one case, for the “life of the work”; and on the other “on all publishing contracts”.

57. [282]

    Ms Bell, an author and client of Ms Anthony since June 2000, has affirmed an affidavit of 4 July 2017. She has deposed that she was referred to Ms Anthony by another author ([5]), that as a “new and emerging” author she had no experience at the time as to how to get manuscript published ([4]); that she does not have a written contract with Ms Anthony ([6]); and that when Ms Anthony agreed to be her agent she (Ms Bell) asked about the terms of her working relationship with Ms Anthony as her agent and they had a conversation in words to the following effect (see [7]):

58. [283]

    Again, there is a seeming contradiction between “for the life of the works” and “from the book deals”.

59. [284]

    Ms Romer affirmed an affidavit in July 2017 (stated on the coversheet to be 4 July 2017). She is a popular fiction author and Ms Anthony is and has been since 2002 her literary agent. She has never had a written contract with Ms Anthony. Her first book was published in 2013. She deposes at [11] to a conversation with Ms Anthony “sometime” after she met Ms Anthony at a writers’ festival in 2002, which included words to the following effect:

60. [285]

    Dr Brooks, an author and associate professor, has affirmed an affidavit on 21 September 2017 in which she deposes to having been a client of Ms Anthony and her company since 2006 “after parting company with Australian Literary Management (ALM)” where she had worked “under the auspices of Lyn Tranter, for six years”. She deposes (at [7]) to her understanding that the agreements with ALM “stand for the life of the books” and refers in particular to a written agreement with ALM on 21 August 2000 containing a particular clause relating to ongoing commission (see at [8]). She states that her agreement with Ms Anthony is oral and (which one might think follows a logical consequence) that she does not have a written agreement with Ms Anthony ([9]).

61. [286]

    She deposes that Ms Anthony made it clear to her that she could leave Ms Anthony’s agency at any time but that Ms Anthony would still be entitled to commission for any books “contracted by her for the life of the book” ([15]). At [22], she deposes to her awareness that she is at liberty to change agents “although Selwa would continue to be entitled to be paid 15% commission on royalties on the life of works she negotiated publishing agreements for”.

62. [287]

    Dr Brooks’ account of her arrangements with ALM contradicts any suggestion that oral agency agreements are the norm in the book publishing industry.

63. [288]

    Ms Davis, a crime fiction author, has affirmed an affidavit on 25 September 2017 in which she deposes to Ms Anthony having been her literary agent since 2007 and to her own mother having been “one of Selwa’s first group of authors”. Paragraph [11] of her affidavit (read as being to the effect of the words Ms Davis recalls being told by Ms Anthony) states that “I was made aware by Selwa at the [unidentified] time of our verbal contract for her to represent me how Selwa’s agency worked; that she received 15 per cent commission on all book deals she negotiated on my behalf for the life of the deal” (my emphasis).

64. [289]

    This account thus links commission to the life of the publishing agreement(s).

65. [290]

    Ms Phillips, a broadcaster and author, has sworn an affidavit on 12 September 2017 deposing that she is a client of Ms Anthony’s literary agency, Selwa Anthony Author Management Agency ([2]). She states that she had a verbal agreement with Ms Anthony ([6]).

66. [291]

    Ms Phillips deposes that at her initial meeting with Ms Anthony the latter said “that we would not be signing an agency agreement, and that this was how she conducted her business”. Ms Phillips deposes that Ms Anthony said words to the effect “I do not sign agreements with any of my authors. My role as agent will be obvious because I will be the one who negotiates with publishers, and handles all the royalties and rights” ([4]). Ms Phillips deposes that Ms Anthony went on to say words to the effect “If an author chooses to go with another agent at some point, I wouldn’t want to force them to stay with me, so a written agreement would be pointless. However in that instance I would still receive the commission on any previous books I had handled. This is standard practice throughout the industry” ([5]). The commission deducted by Ms Anthony in Ms Phillips’ case was 15% plus GST (see [9]).

67. [292]

    Ms Brooks is an author and company director who joined Ms Anthony’s author management agency in May 2012 (see her affidavit affirmed 12 September 2017) – hence, many years after the events in question in the current proceedings. Her recollection is that she and Ms Anthony had “extensive” discussions usually by telephone in which Ms Anthony said words to the effect “I need to explain to you how literary agents work. A verbal agreement between you and me is all that is necessary to confirm that I am your agent” ([4]) and (at [5]):

68. [293]

    This account says nothing about the basis on which there would be any ongoing entitlement to commission.

69. [294]

    Complaint is made by Ms Morton that this evidence is from a “tiny sample of Ms Anthony’s hand-picked authors”. As to the size of the sample, it is noted that Ms Anthony does not give evidence of client numbers in 2002 but that (by reference to her current website client list) the evidence represents about 7% of her current client list. It is submitted that this is not enough to demonstrate a consistent and universal practice across Ms Anthony’s client base. It is also submitted that the conversations deposed to after March 2002 (namely the evidence of Dr Brooks at [2]; Ms Brooks at [2]; Ms Davis at [3]; Ms Phillips at [3]) are irrelevant as to Ms Anthony’s practice in or about March 2002. Even if admitted, it is submitted that the evidence proves only that Ms Anthony did not have any consistent or identical mode of practice prior to March 2002.

70. [295]

    Ms Morton also makes the following points in relation to the evidence of other authors.

71. [296]

    First, that a number of the authors made no reference to what was to happen to commission in the event of termination of the agency (see Ms Armstrong (at [4]); Ms Brooks (at [5]); Ms Groff (at [8]; [28] and [29]), Ms Romer (at [11]), Mr Thomson (at [7]) and Ms Williams (at [49]).

72. [297]

    Second, that Ms Romer’s evidence is that Ms Anthony instructed her not to seek legal advice but to “trust” her instead (see extract above at [284]). (Whatever the wisdom of such a statement by Ms Anthony, it does not go to any issue in the present proceedings.)

73. [298]

    Third, that there were differences in what was said to those authors who refer to discussions as to what would happen on termination. In particular, it is noted that Ms Bell said that if she left the agency, Ms Anthony told her that “I’ll still be legally entitled to 15% commission on all royalties from the book deals I’ve negotiated on your behalf” (at [7]) (which it is submitted limits the commission to the publishing contracts that Ms Anthony negotiated) whereas Ms Phillips’ evidence is that she was told in 2008 that if she decided to go with another agent then Ms Anthony would still receive the commission on “any previous books I had handled” (at [5]) and that this was “standard practice throughout the industry”, and that Ms Hanet-Hutchins gave evidence that she overheard Ms Anthony saying from time to time from 2003 onwards that: “You will be free to leave my agency and get a new agent anytime you like but I will always be your agent for the life of that book” (at [30]) (which Ms Morton argues this is plainly self-contradictory and says nothing about any ongoing entitlement to 15% commission).

74. [299]

    Ms Morton submits that the evidence of other client authors should be rejected on the basis that it has no probative value. It is submitted that describing the evidence as “business practice” does not disguise the fact that, in truth, it is an attempt to adduce tendency evidence (referring to Jacara at [65] and [66]) and that, as tendency evidence it has no probative value, let alone “significant probative value” as required by s 97(1) of the Evidence Act. Alternatively, if it is admitted, it is submitted that it undermines Ms Anthony’s case by demonstrating that there was no standard practice on Ms Anthony’s part.

75. [300]

    As to the evidence of Ms Wilkins, including the whole of her third affidavit, Ms Morton submits that this should also be rejected as having no probative value since: Ms Wilkins was not Ms Anthony’s agent; and the alleged conversations between Ms Morton and Ms Wilkins occurred either prior to the alleged agency agreement in 2000, or afterwards in 2005. Ms Morton submits that Ms Wilkins’ understanding of her own agency agreement has no bearing on whether or not she (Ms Morton) and Ms Anthony reached an oral agency agreement in March 2002.

76. [301]

    In Jacara, Sackville J, with whom Whitlam and Mansfield JJ agreed, upheld a decision of the primary judge to reject evidence on the basis that it was tendency evidence which lacked significant probative value. In that case, Jacara (the lessee of a kiosk at a shopping centre) alleged that it was induced by a series of misrepresentations made by an agent acting for the lessor Perpetual, to enter into a lease of a kiosk at a shopping centre. The primary judge rejected evidence from other tenants concerning representations which they said had been made to them by Ms Kelly.

77. [302]

    Sackville J considered that the evidence was tendency evidence. Importantly, in his Honour’s view, even if the evidence was being relied upon to establish a business practice, it was still properly characterised as tendency evidence: at [66]:

78. [303]

    His Honour then contrasted a case where a business practice was established independently of any tendency evidence, saying (at [67]):

79. [304]

    Having concluded that the evidence of the tenants was properly characterised as evidence seeking to prove a tendency, his Honour concluded that no error was disclosed by the primary judge’s conclusion that it did not have significant probative value. His Honour observed that the primary judge had adverted to differences between the accounts of the tenants in question, and, also, the differences between the accounts of the tenants on the one hand and Jacara’s representative on the other. Those differences included differences in the size of the increase which was represented (one deponent referred to a forty per cent increase having been represented; whereas three deponents made no reference to percentage; and the plaintiff alleged a representation of a “fifty to sixty percent” increase) (at [79]). There were also marked differences in the turnover representations: see at [80]:

80. [305]

    His Honour concluded that, having regard to those differences, the evidence lacked significant probative value. It was therefore necessary to exclude it and it was therefore incapable of establishing a business practice or system.

81. [306]

    I consider that, like Jacara, the present is a case where the impugned evidence is only capable of being relevant if it is capable of establishing a tendency or propensity on the part of Ms Anthony. That is because the evidence does not feature any independent indication of a business practice, system or structure (such as an instruction to employees – the example given by Sackville J; one could also postulate the example of an invoicing system) which does not rely on tendency reasoning. Rather, Ms Anthony relies on the fact that she entered into contracts with other authors in a certain way in order to establish that she had a business system, from which it can be inferred that she followed that practice in the present case. The evidence thus relies on tendency reasoning. Therefore, in my view, Jacara indicates that the evidence should be rejected if it does not have significant probative value as required by s 97(1) of the Evidence Act. I conclude below that it does not meet that threshold.

82. [307]

    Even if that is not the correct understanding of Jacara, I would have concluded that the evidence is not capable of establishing a business practice or system relevant to the fact in issue (as articulated by Ms Anthony) in any event; and in this regard I turn to consider the other authorities relied upon by the plaintiff.

83. [308]

    Ms Anthony referred to Trylow v Commissioner of Taxation [2004] FCA 446. In that case, there was an issue as to whether Eureka or Proline employed labourers who, under contractual relations with Trylow, were directed to work at sites where contractors were engaged in projects. As such, the actual business of each company during the relevant period was a fact relevant to the dispute (see at [109]).

84. [309]

    There is a reference at [117] of the judgment to what might have been the tendency aspect of the evidence, but this does not in my opinion assist Ms Anthony. Hill J there expressed doubt as to whether “merely” the fact that Eureka had engaged in “a series of cheque cashing transactions” was of significant probative value in proving “that transactions entered into between the same company and Trylow were of a similar kind”. His Honour might have allowed the evidence as tendency evidence to the extent that the transactions were within the same period and the invoices were not merely in similar form but were in fact in identical handwriting to those which the plaintiff received (at [117]).

85. [310]

    At ([118]) Hill J said:

86. [311]

    In my opinion, Hill J’s decision does not assist Ms Anthony on her business practice argument – the evidence was adduced (and admitted) on the basis that it was directly probative; nor could it be said that it assists her on the tendency argument, as the evidence here clearly does not reach the level of similarity contemplated by Hill J at [117].

87. [312]

    Similarly, in Unique International College Pty Ltd v Australian Competition and Consumer Commission [2018] FCAFC 155, the existence of the system or practice was itself a fact in issue, and so the Full Court held that the primary judge had not resorted to tendency reasoning by having regard to it (at [206]-[207]). That is clearly not this case.

88. [313]

    Reference was also made by Ms Anthony to Connor v Blacktown District Hospital [1971] 1 NSWLR 713 (Connor). There, the evidence which the trial judge had rejected was evidence in the defendant’s case from a Mrs Robinson, who had been employed at the hospital for nearly two years prior to the accident in which the plaintiff was injured and was in charge of cleaning the belt room or servery both in general and on the day in question. The trial judge rejected as irrelevant her evidence as to the practice up to the time of the accident in regard to the cleaning of the room. Asprey JA (with whom Mason JA agreed) held that this was an error and that the evidence was relevant, saying (at 719):

89. [314]

    At 721, Asprey JA said:

90. [315]

    Connor was recently applied by the Court of Appeal in SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2017] NSWCA 132. There, McColl JA (with whom Gleeson JA and Sackville AJA agreed) observed that, even if it were the case that the witness, an auctioneer, had relied on his regular practice at auctions to state his recollection in an email about the GST component of the price, this would not have deprived the evidence of weight (at [150]). Another case applying Connor (to which Ms Anthony also referred) is Tinnock v Murrumbidgee Local Health District (No 2) [2016] NSWSC 87. There, Campbell J allowed evidence from two surgeons “very largely based upon matters of standard practice” as admissible circumstantial evidence of a fact in issue (the issue of consent (see at [40]). His Honour considered the evidence admissible where the witness had given evidence in “sufficient detail” of his “usual and invariable practice” (at [5]).

91. [316]

    In my view, the principle in Connor regarding the admissibility of evidence of a routine, habitual or general practice does not assist Ms Anthony, having regard to: the gaps in time between the conversations to which the various deponents deposed; the differences between those accounts; and the unexplained quantity of other clients with whom Ms Anthony has or had agency agreements. In my opinion, the evidence (even if accepted) is not capable of establishing anything that Ms Anthony invariably did, or with regularity or habit, other than a practice of not entering into written agreements and of charging a 15% commission for her services. (Even then, the evidence of two of the authors puts the commission at 10%.) It therefore is not capable of rationally affecting the probability that she had a particular conversation on a particular occasion with Ms Morton as to an ongoing entitlement to commission in the way contemplated in Connor (nor that Ms Morton agreed to such terms).

92. [317]

    I have thus concluded that, other than as to the oral nature of the arrangements and as to the charging of a 15% commission during the term of the agency agreement, the evidence is not capable of establishing a business practice or system in accordance with Jacara because, as I conclude below, it does not have significant probative value. I would have admitted the evidence as going to Ms Anthony’s business practice in those two limited respects (the oral nature of arrangements and the rate of commission). However, this was not the basis on which it was sought to be admitted and in any event there is no dispute as to the fact that there was never a written agreement between Ms Morton and Ms Anthony; nor that a commission of 15% was to be deducted. Since I have concluded that the evidence is otherwise not capable of establishing a practice or habit as referred to in Connor, I would reject the evidence on this ground.

93. [318]

    As to its admissibility as tendency or coincidence evidence, I note as follows. Section 97(1) of the Evidence Act provides:

94. [319]

    In Jacara, Sackville J said at [61]:

95. [320]

    In Hughes v The Queen [2017] HCA 20; 92 ALJR 52, Kiefel CJ, Bell, Keane and Edelman JJ (at [16]) described tendency evidence as follows:

96. [321]

    Their Honours then said (at [16]):

97. [322]

    Gageler J said in Hughes v The Queen at [70]:

98. [323]

    In addition, the Evidence Act imposes a requirement that the evidence must have “significant probative value”. In Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1995) 61 FCR 171 at 175-176 (referred to in Jacara at [72]-[73]), Lehane J said:

99. [324]

    Here it is submitted for Ms Anthony that there is a striking similarity between the oral contracts Ms Anthony entered with each of the author witnesses called in her case on the one hand and the contract she alleges was entered into with Ms Morton on the other; and that that those contracts are consistent as to their terms and manner of formation with the business systems evidence with respect to Ms Anthony’s agency and the industry practice evidence. Thus Ms Anthony submits that the evidence is admissible on either or both of the bases set out in the tendency and coincidence notices.

100. [325]

     In Cantarella Bros Pty Ltd v Andreasen [2005] NSWSC 579, the defendants sought to adduce tendency evidence to establish “which of two versions of contractual conversations between the plaintiff and the defendant was more likely”: specifically, whether (as the defendants alleged) it was a term of a contract for the supply of coffee that the plaintiff coffee company supply the defendants with large umbrellas to cover an outdoor area. The second defendant gave evidence of a conversation with another potential coffee supplier. When that supplier told him he could not provide permanent umbrellas the second defendant said he ceased to pursue business with that supplier.

101. [326]

     Hamilton J considered that this evidence was capable of rationally affecting a fact in issue, but not of proving a tendency (at [7]):

102. [327]

     His Honour said (at [7]):

103. [328]

     His Honour also said in relation to this evidence: at [12]:

104. [329]

     Hamilton J distinguished Jacara (which concerned “a tendency to make particular types of representations”), saying (at [13]):

105. [330]

     However, other parts of the evidence were rejected as irrelevant, being entirely evidence of “subjective intent” (see at [8]).

106. [331]

     By way of contrast, the decision of Jagot J in Twynam Pastoral Co Pty Limited v AWB (Australia) Ltd [2008] FCA 1922, like Jacara, concerned a claim for damages for misleading or deceptive conduct by representation. Unlike Cantarella Bros, the fact in issue in Twynam was not the formation of a contract. The alleged representations, particularised at [3] of the judgment, included that “if the applicant didn’t buy at that time the applicant would be unable to purchase feed wheat until October 2003”.

107. [332]

     The evidence of tendency, extracted at [5], was adduced from various individuals who had had business dealings with Mr Adams (the alleged maker of the representations). In conversations at around the same time of the alleged representations, Mr Adams had made statements to them such as, “I thought I’d better give you a ring … because if you don’t purchase now, there will be no wheat in Australia from March 2003 until the harvest begins in October”. The statements were all made during the same period.

108. [333]

     Jagot J admitted the evidence as tendency evidence, saying (at [13]):

109. [334]

     I have concluded that the impugned evidence in the present case does not have significant probative value. I accept that it establishes that Ms Anthony has made oral agreements with authors in the past and over a number of years which include the 15% ongoing commission term; and that she may even have done so often. However, I do not accept that such a tendency has significant probative value, because of the lack of striking similarity in the occurrence of those instances. The tendency must be viewed in light of the period of time during which Ms Anthony has operated as an agent; the significant number of authors with whom she must have had agreements (including those who may, for example, have terminated her services – as to whom (apart from Mr Thomson and Ms Williams) I heard and know nothing); and the differences in the accounts given by the various client authors and Ms Anthony’s assistants as to what was said.

110. [335]

     I am not satisfied that there is striking similarity in the way that Ms Anthony deals with those of her authors who have given evidence and I have no knowledge of how many other authors there are for whom Ms Anthony acts or has acted as agent over the years. This intersects with the difficulty as to the lack of coincidence in time of the evidence (had that problem been addressed, the evidence might have had greater probative value).

111. [336]

     Given that most of Ms Anthony’s career has been spent as a literary agent, I cannot exclude the likelihood that she has had many arrangements with many authors over a long period. It might have been a different matter if, say, all the contracts, including the contract with the plaintiff, were made within a period of a few weeks; but that is not this case. This is the first reason for concluding the evidence does not have significant probative value. The second relates to the difference between contracts and representations. I take into account that, whilst one might quite naturally speak of a tendency to make representations, it is a less likely proposition that a person might have a tendency to enter into particular contracts. Of course, that is not to say it is an impossible proposition, but it is less readily accepted, as a matter of ordinary common sense. A high level of similarity or coincidence in timing would seem to be called for in order to establish that such a tendency has significant probative value.

112. [337]

     Weighing this factor, together with the lack of coincidence in timing or striking similarity of the other instances, had the basis for admissibility rested on its quality as tendency/coincidence evidence I would have concluded that the evidence does not have significant probative value and would still have rejected it.

113. [338]

     In any event, even if (contrary to my conclusion) the evidence of business practice or tendency/coincidence evidence were to be admissible, beyond the two aspects (i.e., of the oral nature of her author agreements and the 15% rate of commission) that do appear to have been sufficiently similar to amount to a uniform practice, it would not have changed my conclusions as to the critical matter in issue (the existence of an oral contract with an ongoing commission term as contended by Ms Anthony) for reasons that I explore in due course.

114. [339]

     Evidence of industry practice was given by two literary agents (Ms Lyn Tranter, who was called by Ms Anthony – not as an expert – to give evidence as to her own experience in the industry; and Ms Jenny Darling, who was called to give evidence as an expert in Ms Morton’s case); and two publishers (Ms Shona Martyn, who was called to give evidence as an expert in Ms Anthony’s case; and Ms Maria Rejt, the publisher at Pan Macmillan UK to whom I have earlier referred, who was called – not as an expert – to give evidence in Ms Morton’s case). I summarise this evidence below.

115. [340]

     Ms Tranter gave evidence by affidavit affirmed 31 July 2017. As noted, she was not qualified as an expert for the purpose of the proceedings. Rather, she deposed to her personal experience as a literary agent, having joined the Australian Literary Management agency (ALM) in 1990 and then having become its sole owner in about 1993.

116. [341]

     Ms Tranter has deposed that during her time at ALM her usual practice has been to enter into written agency agreements with authors who retain ALM to act as their agent (see [6]); and that ALM’s agency agreements provide “that ALM is entitled as the author’s literary agent to receive commission on royalties at a rate of 15% for the life of the work, which is specified in the agreement to be either the term of the copyright or for so long as a published work remains in print” (see [8]). A copy of a standard form ALM agency agreement was in evidence.

117. [342]

     Ms Tranter expressed the opinion (at [10]) that a commission at the rate of 15% is standard across the publishing industry. (There seems to be no dispute as to this being a standard rate.) Ms Tranter also deposes that when ALM’s authors enter into publishing agreements which she has arranged for them those publishing agreements contain an agency clause which “recognises ALM as the relevant literary agent” for that agreement (at [11]).

118. [343]

     Ms Tranter deposes to occasions where authors have left her agency “amicably or otherwise” and says that in those circumstances ALM “continues to be entitled to receive commissions on works it has arranged to be published for the life of the work or so long as a published work remains in print” ([13]), giving an example of an instance where this has occurred ([13]).

119. [344]

     Ms Tranter (at [16]) has also deposed that her written agency agreement contains a statement that:

120. [345]

     Interestingly, this does not appear to accord with the understanding to which she had earlier deposed (at [8]) that the life of the work means either the term of the copyright or so long as the published work remains in print. Rather, what is set out at [16] of her affidavit appears to link the agent’s entitlement to ongoing commission to payments flowing from the negotiated publishing agreement (though perhaps Ms Tranter was there relying on the irrevocable “assignment of an agency fee” in that regard).

121. [346]

     Ms Tranter confirmed in her oral evidence that she complies with the Australian Literary Agent’s Code of Conduct (the Code), being the code of practice of an association comprised of well-respected literary agents (see T 198.3-10) (Exhibit 8, CB 7/2945). The Code requires (see at cl 7) that all members must provide in writing details of their terms and commission to a new client; and states that authors must be made specifically aware of cll 1 and 2 of the Code. Relevantly, cl 2 of the Code provides that:

122. [347]

     Thus the Code contemplates commission being linked to the subsistence of the relevant publishing agreements (not to the life of the work). (That makes sense insofar as the continuing commission is to be calculated on payments deriving from agreements negotiated by the agent; in contrast to the position where a new publishing agreement (with perhaps a wholly different royalty structure) might be negotiated by the new agent – as has happened in the present case.)

123. [348]

     Ms Darling was the only literary agent called as an expert to give evidence. She has over 30 years’ experience in the book industry. In her report dated 6 July 2017 (CB 4/1413) she states that, prior to her engagement as an expert in this case, she had not heard of the term “Agent on the record” in her professional practice (see [4] of the report). Ms Darling annexed to her report a copy of the Australian Literary Agent’s Association Code of Practice which was in existence in 2002 and has not since been amended.

124. [349]

     Questioned as to whether, between 2002 and 2005, an agent would “uniformly receive” ongoing commissions for the life of copyright in the literary work in circumstances where: there was no written agreement between author and agent; there was no written agreement as to fees and royalties after termination; the author has left the agency and engaged a new agent; and the old publishing agreements are terminated and the new agent has negotiated new publishing agreements to replace the old (i.e., in essence, the case for which Ms Morton contends), Ms Darling’s answer was “[b]ased on my experience, no” ([8] of the report).

125. [350]

     In her report, Ms Darling then provided various comments (often in quite pejorative terms) as to the content of the A&U publishing agreements “[from] the perspective of the publishing environment in 2005 till 2010” ([9] of the report). I do not propose here to go through those comments. Ms Darling appears to have been quite ready to level accusations of lack of thought, laziness, speed or incompetence in relation to the drafting of the said agreements; she describes the first A&U publishing agreement as “borderline acceptable” and the balance as “unacceptable”; she criticises the drafting of various clauses (in part by reference to what she would consider to be an acceptable version of clauses of the particular kind there being reviewed) and the substantive content of various clauses, including the royalty clause (cl 9) ([25] of the report); and she describes the drafting of various clauses as “problematic” (or “extremely problematic” in the case of cl 19). She uses quite emotional language in places, accusing Ms Anthony of “betrayal” and a complete dereliction of duty. I found much of this report (as to which, not surprisingly, objection was taken by Ms Anthony) quite unhelpful and not to the point. The complaint made against Ms Anthony in the cross-claim is not as to her drafting abilities (or those of whoever was responsible for drafting the A&U publishing agreements); nor as to her general competence as a literary agent. In substance, the complaint is as to the grant of world rights under the relevant agreements. (By the same token, glowing references to Ms Anthony’s exemplary performance as a literary agent also seem to me to be beside the point.)

126. [351]

     What is clear from Ms Darling’s report (as clarified in her affidavit of 3 July 2018 – see CB 5/1941) is that in her opinion a reasonably competent agent at the time would not have recommended that Ms Morton enter world rights publishing deals for Books 3 and 4; nor for Books 5 and 6.

127. [352]

     Ms Darling’s reasoning for that conclusion includes the fact that the earlier world rights deals entered into included “at least three layers of commission” – 15% to Ms Anthony; 20%-25% to A&U depending on the territory; and 10% to the sub-agents used by A&U in each foreign territory. Ms Darling thus concludes that there was a minimum 45% commission deducted from gross receipts due to Ms Morton. (In practical terms there can be no dispute about this.)

128. [353]

     Ms Darling summarised the position as being that, by the time of entry into world rights deals for Books 3 and 4, in 2007: there had been $AUD822,440 in advances; “The Shifting Fog” (also known as “The House at Riverton”) had been listed on the Richard and Judy Show in the United Kingdom; and, by the final week in June, 165,000 copies were in print in the UK (see CB 4/1426 at [68]). Ms Darling’s opinion was that the European publishing world was by then Ms Morton’s “oyster” (CB 4/1426 at [74]).

129. [354]

     In cross-examination, Ms Darling’s evidence was that a reasonably competent literary agent would not have advised Ms Morton to enter into the world rights deals in July 2007 (T 319.38-39); and, in her opinion, that was the time for Ms Morton and Ms Anthony to decide the best course of action together (T 319.39-43; T 321.44-48). Ms Darling’s evidence was that an opinion about the best course of action “is not for the agent to form ... alone, it’s for the agent to form that opinion with the author” (T 322.37-38).

130. [355]

     Ms Darling states that, in her experience when she acts internationally for a successful author, the commission rate would usually be no more than 20% in total (with the commission being split between her and the foreign agent) (see [70]). She deposes that in her experience this is also what a reasonably competent agent could have achieved at the relevant times (see her affidavit affirmed 3 July 2018 at [5]; [7]); and that the net difference to the author could be at least 25% and up to 30% of gross revenue (see [71] of the first report as amended at [6] of her affidavit).

131. [356]

     Ms Darling’s evidence as to custom is that she has a written agreement which specifically states that 15% commission will be directed to Jenny Darling & Associates, even after an author leaves the agency (see T 313.6-313.15), on contracts that the agent negotiates. Ms Darling’s evidence is that there is no industry custom that an agent would be entitled to ongoing commission after the agency contract was terminated in instances where the publishing contract was also terminated (see T 316.42-316.50; 317.19-317.33).

132. [357]

     Ms Martyn is a Senior Book Publishing/Arts Executive. She describes her book publishing experience as spanning 19 years working as the most senior publisher for two of Australia’s leading multi-national publishers – Transworld/Random House (1996 to 1999) and HarperCollins Australia (1999 to December 2016). During those senior executive roles she says she was responsible for negotiating contracts with Australian and international agents and authors securing the “broadest rights possible”; approved advances and royalties, the structure of deals and any deviation from standard terms and was the “company signature” on thousands of publishing contracts over close to 20 years. She has never worked as a literary agent (see T 202.5-6).

133. [358]

     Ms Martyn’s first report (CB 1/276), surprisingly headed “Confidential and Subject to Legal Professional Privilege”, is dated 12 July 2017. In preparing her report, Ms Martyn reviewed certain of the pleadings and some of the affidavit evidence (see [12]) and she says that, in addition, she relied heavily on her own knowledge and experience. Ms Martyn also referred to industry references including a text by Hugh Jones and Christopher Benson, Publishing Law (Routledge, Oxford), the most recent edition of which is the fourth which was published in 2011 (an extract from which is Exhibit 1) (see T 202.25-40) (see [385] below). In cross-examination Ms Martyn made clear that she had based her opinion on 20 years of experience in the book publishing industry, talking to many people, agents, reading and also attending conferences where there were panels of agents and authors talking (see T 202.40-45). (None of that, of course, is able here to be tested given the generic terms in which it is cast; and a Makita objection (see Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305) to that effect is well-made.)

134. [359]

     Ms Martyn’s first report (at [18]-[19]) (in answer to question 24 in Ms Anthony’s solicitors’ letter) states that:

135. [360]

     The only sensible conclusion that can be drawn from the above is that, in Ms Martyn’s experience, there was no uniform practice at the relevant time for agency agreements either to be oral or to be in writing – some agents relying on a written agency agreement, some on an oral “handshake agreement” (thus contradicting any proposition that there was a uniform practice in the industry – as opposed to it simply being Ms Anthony’s own standard business practice throughout her time as an agent – for agreements between literary or authors’ agents and authors to be entered into orally).

136. [361]

     As to the rate of commission (question 25), Ms Martyn says that in March 2002 it was uniform practice for agents and authors to agree on commission prior to the agent offering work to a publishing house or houses and that the percentage included in this arrangement was something to which a publisher would not be privy ([20]). She then goes on to say (from her training, experience and general interaction in the publishing industry) that she has observed and understood that most agents take a 15% commission and she has said that this would be seen as common knowledge (though she says that some historic agreements set the commission at the 10% level – as I note was the evidence in the present case from Ms Anthony’s earliest client authors). That evidence is consistent with Ms Tranter’s evidence (see [342] above) and Ms Darling’s evidence of her own experience (see [356] above).

137. [362]

     Ms Martyn also stated that contracts issued by publishers or agents include an “agency clause” and an author’s address is stated as care of the agent “for avoidance of doubt” ([22]). By reference to the passage of her report extracted above, it appears that Ms Martyn considers that the purpose or effect of such a clause is to allow payments to be directed to the author care of the agent (see [18]).

138. [363]

     In answer to a question posed as to whether there was a uniform practice for agency agreements to include a term “that for each work written by an author for which the agent negotiated a publishing agreement, the agent would be entitled to a commission for the life of that work if the agency agreement was terminated” (question 27), Ms Martyn says that in March 2002, in her experience, it was uniform practice for offers from publishers to include “a term for the deal” in an offer to an agent for an author’s work and that in Australia the industry standard is that publishers offer advances for the term of copyright (see [26]).

139. [364]

     Ms Martyn confirms that, as a publisher, she was not party to the specific agreements between agent and author but goes on (without stating the basis for this opinion other than as generally outlined at the beginning of the report) to say that it was an industry standard “from the publisher’s perspective” that the agent representing the book “would continue to act for the book through its life – and to be entitled to the ongoing commission that they had agreed” ([27]); and that “[t]he life of the work would generally be considered the time when the book was in print or available as an e-book or in other format recognising that copyright in Australia continues to 70 years after death” ([28]) (and see also [36] to similar effect); and that “the author/agent arrangement around the work continues even if the original publisher no longer continues to be involved” ([28]).

140. [365]

     As to the event where the agency agreement was terminated by either party (question 29), Ms Martyn says (again without stating any specific basis for that opinion other than the general matters set out at the start of her report) that in March 2002 through to December 2015, it was uniform practice “that if an author decided to sever their relationship with an agent, the agent would continue to represent any works previously contracted – whether published or not – and take their commission as previously agreed between those two parties for the life of the book” ([30]) (see also [34] to similar effect). It is not clear what Ms Martyn contemplates by any such continued representation (other than receipt of royalties and deduction of commission); nor is it clear how an agent would, after severance of the agency relationship, continue to represent an author on an “unpublished work:, though that is seemingly what Ms Martyn is here saying.

141. [366]

     At [32], Ms Martyn offers the (unsolicited) opinion that as a publishing director she would not agree to vary contractual clauses around the payment of royalties “on the say so of the author alone”, going on to say that “it was the agent, after all, who had brought the deal to the publisher and had been party to the negotiation and was named in the agent clause of the contract”. Apart from the fact that whatever stance Ms Martyn would or would not have taken as a publisher is irrelevant to any issue in the proceedings, this answer must be seen in the context of what the relevant publishing agreement provided. In the present case, A&U (as its solicitors explained, quite correctly, to Ms Anthony’s solicitor) was bound by the terms of its publishing agreements with Ms Morton – it had no contractual obligations under those agreements to Ms Anthony.

142. [367]

     Ms Martyn states at [35] that the term “agent of record” is not used widely in either Australian or UK book publishing.

143. [368]

     In her second report dated 27 September 2017 (CB 1/415), again bearing a heading asserting legal professional privilege, Ms Martyn responds to Ms Darling’s reports. Amongst other things, in that report Ms Martyn says (again) that prior to her engagement as an expert in the case she had not heard of the term “Agent on the Record” in her professional practice and that “this term is not generally used in Australian book publishing” (p 1). She notes that “clearly” the more successful the author the more negotiating power an agent has; says that it was not normal for Australian publishers to offer less favourable contracts to “un-agented” authors; says that she did not consider the A&U publishing agreements to be “strange” agreements; and responds to the various criticisms made by Ms Darling as to the terms of the A&U agreements (pp 2-5). Ms Martyn emphasises “how subjective the decision making around rights sales or in acquiring books is” especially with a first-time author and says that in her experience if an agent has sold rights for book one “and they are happy to continue with the same publisher then they are likely to continue to offer world rights” (p 5) (which rather begs the question whether it is in the author’s interests to continue with a world rights deal). She says that in her experience there are agents in both Australia and overseas who will offer world rights deals (an observation that takes the matter nowhere in the present case).

144. [369]

     In that second report, Ms Martyn seems to have speculated on one matter about which it is difficult to see that she could offer an expert opinion – in that she expresses the view that the A&U publishing agreement for Book 2 (which she was asked to assume was signed by Ms Morton in about February/March 2006 but appeared to have been backdated to May 2005) “was not backdated, rather in overwriting the contract for book 1 the Allen & Unwin contracts department neglected to change the date”. This, on any view, can only be an assumption on Ms Martyn’s part (see p 6) since it is not suggested that she had any personal role in the negotiation or execution of that publishing agreement.

145. [370]

     Posed the same question as that to which Ms Darling had answered in the negative (see [349] above), Ms Martyn states that the situation there outlined would be uncommon (p 2) and that:

146. [371]

     Ms Martyn goes on to observe that the “preferred agency clause” cited by Ms Darling at [46] of her report included a direction to the publisher to continue paying commission to the original agent post-termination of the original author-agent relationship.

147. [372]

     As to the main differences between a world rights deal and a territory by territory deal (question 8) Ms Martyn agrees with Ms Darling’s general description and does not demur from the proposition that additional layers of commission would be payable under the former arrangement.

148. [373]

     As to whether she would have recommended a world rights publishing deal for Books 3 and 4, and 5 and 6, Ms Martyn states (somewhat unresponsively) that, in terms of Books 3 and 4, “there was scope for the agent to put pressure on all the terms offered by Allen and Unwin given the international success and royalties flow” (p 6); and that in terms of Books 5 and 6 “at this moment every aspect of the continuing arrangement with Allen and Unwin should have been reviewed” and “a ‘sense check’ around what other publishers would offer undertaken” (p 6). As to Books 5 and 6, Ms Martyn goes on to say that “[g]iven the author was positive in her views on Allen and Unwin, she may have wished to remain with them however as they would be reluctant to lose her, they could surely have been pressured to pay more” (hardly a ringing endorsement of Ms Anthony’s conduct in this regard).

149. [374]

     Questioned as to her opinion as to whether it was in Ms Morton’s best interests to enter into the A&U publishing agreements, Ms Martyn makes various comments, including that it is very rare for a first time author to become an international success and that, as Ms Morton’s career advanced, “a benchmarking or sense checking against what other publishers would offer could have led to the re-negotiation of advances and terms” (p 6) (again, a somewhat unresponsive comment but one which suggest that attention should have been paid to the financial consequences of the world rights licensing at the time). Ms Martyn considers that the fact that Ms Morton was and remains in a continued relationship with A&U and her publisher Ms Barlow “is likely to have been a factor in considering her interests” (page 6) but goes on to say that any answer is speculative as many successful authors’ sales decline rather than increase as their career progresses and it is impossible to tell what another publisher would have achieved.

150. [375]

     Ms Martyn’s conclusion is that Ms Anthony acted competently, though I interpose here to note that her observations as to Books 5 and 6 (and to a lesser extent Books 3 and 4) suggest that a careful review should have been undertaken at both those points before entering into world rights deals for the works. I regard Ms Martyn’s evidence as to the wisdom of entering the world rights deals for Books 3 to 6 as equivocal, to say the least.

151. [376]

     For Ms Morton, it is noted that Ms Martyn’s experience was confined to what Ms Martyn had been told in particular instances by agents about the terms of their commission (see T 205.15-20); that Ms Martyn has never seen the precise terms between an author and agent in her role as a publisher (see T 205.45-50; T 206.10-15); and that the most Ms Martyn can say was that she saw the actions of authors and agents who had parted ways; but Ms Morton argues that this ultimately does not assist the determination as to whether there was any legal entitlement to ongoing commission under any particular agency agreement. I agree.

152. [377]

     It is submitted for Ms Morton that, ultimately, all that Ms Martyn was able to say was that her experience accorded with the text of Publishing Law (see T 203.25-35), being that most literary agents entered into some kind of written agreement with their authors. Ms Morton notes that Jones and Benson also state that “[t]he entitlement to reasonable remuneration comes to an end straight away when the agency is terminated, unless the contract provides otherwise” (my emphasis) (see Ms Martyn’s evidence as to this at T 204.1-5).

153. [378]

     Ms Rejt, as already noted, is a publisher. She has worked in trade publishing, always in an editorial capacity, for over 35 years and, since 1990 for the most part with Pan Macmillan in the United Kingdom (see her affidavit affirmed 21 June 2017 at [1]). She has deposed to her experience working with authors and literary agents in that time (see [2]).

154. [379]

     Ms Rejt deposes to having first become aware of Ms Morton’s work in 2006 at the London Book Fair ([3]); and says that Pan Macmillan does not often buy first time novelists where the rights to the Australian market have already been sold but that she pursued it and acquired the rights to Ms Morton’s first two novels ([5]).

155. [380]

     Ms Rejt also deposes to the circumstances in which “The Shifting Fog” (by then titled “The House at Riverton”) was featured on the Book Club of the Richard and Judy Show in the UK ([7]) (in around June 2007) (the affidavit does not give a date but it appears from other evidence that this occurred in 2007 – see Ms Morton’s second affidavit at [23]; Exhibit 8, CB 6/2261) and says that in the first week after the book was featured on that show 63,000 copies were sold through the total consumer market ([8]).

156. [381]

     As to the world rights agreements, Ms Rejt deposes that she could understand why Ms Anthony did a world rights deal with A&U for the first deal (see [19] of her 21 June 2017 affidavit) but says that in her experience it is not usual for world rights to be sold to a publisher after the first deal ([20]). Ms Rejt deposes (at [20]) that:

157. [382]

     Ms Rejt deposes that she had only personally negotiated a world rights deal for one highly successful author (who had come to Pan Macmillan in 1975 without an agent and never had a third party agent Pan Macmillan acting as his agent as well as publisher) ([21]). Her evidence (at [22]) is that:

158. [383]

     In an affidavit affirmed 14 December 2017, in response to Ms Anthony’s affidavits of 28 September 2017 and 18 October 2017, Ms Rejt deposes, among other things, that in her experience she had found dealing direct with an agent to be in the best interests of both Pan Macmillan and the author because dealing with a publisher “even though we have been granted exclusive rights by them in our market, often entails restrictions on when we can publish our exclusive edition that best serves our local market’s interests and thus may affect sales of the book in our exclusive market” ([5]) and that she would have preferred to deal directly with Ms Morton or an agent from Book 3 onwards ([7]) (she was not able to do so when she first heard of Ms Morton’s novel because the UK rights were already controlled by A&U). Ms Rejt could see no obvious benefit for the author to continue with another publishing deal for world rights when the first two novels under the first contract were so successful and publishers were in place for each market ([9]).

159. [384]

     Having considered [60] of Ms Anthony’s 18 October 2017 affidavit, Ms Rejt remained “completely convinced” based on her experience that the second subsequent world rights deals negotiated between Ms Anthony and A&U were “absolutely not” in the author’s best interests ([34]).

160. [385]

     The fourth edition of the text to which Ms Martyn referred in her evidence (Exhibit 1) contains the following, at pp 146-147 (the authors having earlier referred to literary agents’ own standard publishing contracts in the context of the author/publisher relationship):

161. [386]

     Ms Anthony submits that an adverse Jones v Dunkel inference should be drawn by reference to the fact that Ms Morton did not adduce evidence from any of Ms Kremer, Ms Barlow or Mr Robert Gorman (the Chief Executive Officer of A&U). It is noted that both Mr Gorman and Ms Barlow were physically in the courtroom during the hearing (see T 210). It is submitted that it can be inferred that both held knowledge that would have assisted the Court, as would Ms Morton’s new literary agent, Ms Kremer who was also in a position to assist the Court but was not called.

162. [387]

     Ms Anthony submits that all three were in a position to give evidence that would have supported or contradicted significant aspects of Ms Morton’s evidence and that it can readily be inferred that all three would have been able to give evidence had Ms Morton wished them to do so. In particular, it is submitted that: first, evidence going to the term “life of the work” is paramount in Ms Anthony’s claim and that Mr Gorman, Ms Barlow and Ms Kremer were in the strongest position to deny or contradict Ms Morton’s claim about her understanding of the meaning of that term; and, second, that the contracting of world rights by Ms Morton to A&U is paramount to Ms Morton’s cross-claim and that each of those three potential witnesses are in key positions to provide evidence as to whether or not this was appropriate for Ms Morton at the relevant stages of her career between 2005 and 2010.

163. [388]

     Thus it is submitted that it can be inferred that any evidence that Ms Kremer, Ms Barlow and Mr Gorman might have given in relation to these matters would not have assisted Ms Morton’s case either on Ms Anthony’s claim or on her own cross-claim.

164. [389]

     The circumstances in which a Jones v Dunkel inference will be drawn were considered in RHG Mortgage Corporation Ltd v Iannis [2016] NSWCA 270 (see Basten JA at [19]–[27] and my judgment at [160]ff) and need not here be repeated. Suffice it to note that what is required for such an inference to be available is an unexplained failure to call evidence as to a matter which calls for explanation from a person whom it could reasonably be expected would be called to give evidence. In the present case, I am not satisfied that an adverse inference should be drawn from the fact that the three persons identified by Ms Anthony were not called to give evidence.

165. [390]

     Apart from the question as to whether those people are in Ms Morton’s “camp” in the requisite sense (Ms Barlow and Mr Gorman being witnesses that would equally have been available to Ms Anthony to call – see T 562.5 – and Ms Kremer, though Ms Morton’s agent, being resident in the United Kingdom and not readily compellable to give evidence), it is by no means clear to me that evidence of the kind suggested would have assisted.

166. [391]

     As to the first of the matters identified in this regard, the critical factual dispute is the alleged conversation between Ms Morton and Ms Anthony in or about March 2002. None of Mr Gorman, Ms Barlow or Ms Kremer was privy to any such conversation. It is mere speculation to suggest that any of them might be able to shed light on Ms Morton’s understanding (back in 2002 (or even 2005) when the alleged agreement was formed) of the term “life of the work”. Nor is it clear to me what relevance any such evidence would have. Whether Ms Morton knew at the time what “for the life of the work” meant in a royalties context says nothing about the likelihood that there was a conversation in the terms alleged by Ms Anthony in about March 2002 (or that she accepted or should be taken to have accepted any such term).

167. [392]

     As to the second of the identified matters, I have already referred to the evidence from Ms Rejt as her own experience as a publisher in relation to the contracting of world rights deals. The evidence of the three potential witnesses as to what was in Ms Morton’s best interests at the relevant time(s) would at best have been cumulative to that evidence and, indeed, might be said not to be independent in any event. Mr Gorman and Ms Barlow are with A&U. They could hardly be expected to agree that it was not in Ms Morton’s best interests to contract with A&U as she did back in 2007 and again in 2010. Ms Kremer is the incoming agent. Her view as to what would have been in Ms Morton’s best interests in the period 2007-2010 in relation to world rights deals might relevantly be gleaned from the arrangements she negotiated for Ms Morton in 2017. I am not persuaded that I should draw an adverse inference from the fact that she was not called to give evidence on that issue.

168. [393]

     It may be accepted that Mr Kremer might have been able to shed light on the content of any instructions given by Ms Morton to Ms Kremer as to the making of the offer made by Ms Kremer in December 2015 (which would be relevant to the issue as to whether the offer was one made on Ms Morton’s behalf as her new agent or was one made by Ms Kremer in her own right). However, that was not the basis on which a Jones v Dunkel inference was sought to be drawn from the failure to call Ms Kremer.

169. [394]

     Moreover, the terms of the offer (namely that the commission was to be payable out of DHA’s commission) give rise in my view to a strong inference that this was an offer made by Ms Kremer in her own right and not as Ms Morton’s agent. Ms Morton gave evidence as to the circumstances in which she was happy for Ms Kremer to be making such an offer (Ms Morton’s wish being for the dispute to be resolved amicably – T 280.26; T 2855.12; T 285.24). It was clear from Ms Morton’s evidence that she regarded the offer as a matter between Ms Anthony and Ms Kremer (she considered it “really generous” and “overly generous” on Ms Kremer’s part – see T 286.6 for example). It was put to Ms Morton that it was on her instructions, or as her agent, that Ms Kremer made the offer (see T 288.33-289.3) but Ms Morton rejected that proposition (see T 288.45).

170. [395]

     In the circumstances I do not draw any Jones v Dunkel inference from the fact that the three identified potential witnesses were not called in Ms Morton’s case.

171. [396]

     It was then suggested (albeit somewhat faintly) for Ms Morton that an adverse inference could be drawn from the fact that Ms Anthony’s solicitor did not give evidence (to rebut the argument that Ms Anthony’s account of having discussed the oral contract with Ms Paton over the six month period through to the filing of the initial statement of claim was a recent invention – see T 462.33ff) though she was in Court instructing during the hearing. However, in the end it was simply said for Ms Morton that it was understandable that Ms Anthony’s solicitor would not give evidence “because there’s no reason to think that Ms Anthony would have raised the oral contract in that six month period” (see T 462.42-462.43).

172. [397]

     I do not draw any inference adverse to Ms Anthony from the fact that her solicitor did not give evidence. It is understandable that Ms Anthony would not seek to call her own solicitor to give evidence at the hearing – not least because of the difficulties that would no doubt cause her solicitor in continuing to instruct in the matter. In any event, I do not accept that an inference of recent invention should be drawn. Rather, my conclusion (from the various iterations of Ms Anthony’s claim in the communications between various solicitors and in the different iterations of her pleading and from the confusion of thought apparent in her evidence in cross examination) is that Ms Anthony was unlikely to have been clear in her instructions to her solicitor at the outset and that her solicitor did not appreciate the logical difficulties in the various accounts she was putting forward on behalf of her client.

173. [398]

     There was no dispute as to the applicable principles when determining whether there is in existence a binding oral agreement; nor as to how the terms of any such agreement are to be determined. Reference was made by Ms Morton to the summary of the principles applicable to proof of oral contracts by Hammerschlag J in John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [93]-[94]. Reference was made by Ms Anthony in this regard to Slattery J’s decision in Curnow Consulting Pty Ltd v JPD Media and Design Pty Ltd [2017] NSWSC 1171 (at [235]-[237]), and to his Honour’s summary as to the legal principles applicable to the implication of terms into oral agreements in Yulema Pty Limited v Simmons [2015] NSWSC 640 (at [50]-[52]). I do not need here to set out those principles.

174. [399]

     As to the principles governing the implication of a term through custom and usage (that phrase including established mercantile usage or professional practice – see Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 440; [1995] HCA 24 (McHugh & Gummow JJ)), it is noted that the existence of a custom or usage that will justify the implication of a term is a question of fact (Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 236; [1986] HCA 14 (Con-Stan Industries)); that the custom must be reasonable, certain and unambiguous (Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd (1973) 129 CLR 48 at 61; [1973] HCA 22 (Stephen J, Menzies & Gibbs JJ agreeing)); and that there must be evidence that the custom relied on is so well-known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract (Con-Stan Industries at 236).

175. [400]

     It is submitted for Ms Anthony that on any view of the evidence it is beyond challenge that a contract existed between Ms Anthony and Ms Morton “who conducted a business relationship amicably and very profitably for in excess of ten years on terms and conditions they readily understood” and that the terms of the contract can be readily determined by the parties’ conduct.

176. [401]

     Pausing here, there is certainly ample evidence that there was an agency relationship between the two (as evidenced by the Agency Clause in the relevant publishing agreements). Whether it was amicable and/or profitable, or not, is not to the point. Ms Morton does not deny that there was a contractual relationship – albeit contending that it was formed around 2005. Rather, what Ms Morton denies is the existence of an oral agreement in the terms contended for by Ms Anthony (whether said to have been made in March 2002 or any later time). In particular, Ms Morton denies any agreement entitling Ms Anthony, after termination of the agency relationship, to ongoing commission on Ms Morton’s books for the life of the copyright of those works. As to the proposition that the terms of the contract between the two can be readily determined by the parties’ conduct is more problematic – in my opinion all the parties’ conduct evidences, relevantly, is that there was an agreement or arrangement whereby Ms Anthony would receive the advances (and royalties) payable to Ms Morton from publishers, would deduct 15% commission therefrom, and would then remit the balance to Ms Morton.

177. [402]

     Ms Anthony submits that the truth is that Ms Morton did not like an arrangement that had been entered into with an Australian publisher; and says that:

178. [403]

     It is not clear to me how the above submission is thought to assist Ms Anthony. Whatever may have been the interests of the UK agent (Ms Kremer) at the relevant time(s) is beside the point. Further, the suggestion that Ms Morton could (or should) herself have challenged the world rights deals with publishers, and could have done so in consultation with Ms Anthony, is difficult to accept in circumstances where Ms Anthony was Ms Morton’s agent and in that role had the responsibility for dealing with the overseas publishers (and, indeed, took Ms Barlow to task back in 2005 when she corresponded directly with Ms Morton) and where Ms Morton did in fact raise the issue as to the level of commission payable in respect of the world rights deals and Ms Anthony told her that she had “fixed things”. It hardly lies now in Ms Anthony’s mouth to suggest that Ms Morton is to be criticised for not taking further steps in that regard (a point I note in relation to Ms Anthony’s claim that Ms Morton has failed to mitigate any loss suffered by reason of the world rights deals). As to the complaint that Ms Anthony has been held wholly responsible” for this arrangement, again this is beside the point. If Ms Morton has a cross-claim against Ms Anthony, it is open to her to bring it (as she has done). It was neither pleaded nor suggested that there was some separate liability of the publisher to Ms Morton such as might have sustained a proportionate liability claim.

179. [404]

     Reliance is placed by Ms Anthony on Ms Morton’s post on an online forum in 2006 (“I’ve been lucky to have a fantastic agent for the past seven years, Selwa Anthony”) as casting doubt on Ms Morton’s denial that Ms Anthony acted as her agent between March 2002 and when she wrote Book 1. Ms Anthony points in this regard to Ms Morton’s acceptance in cross-examination that in 2006 she had described Ms Anthony as having been her agent for the past 7 years (saying “Yes and that - I think that’s an accurate retrospective description”). I consider that Ms Morton’s evidence in cross-examination made clear that she regarded Ms Anthony (from as early as around 2000, following her introduction by Ms Wilkins) as someone to whom she could submit her work and that it was in that sense that she considered her to be her agent; not in the sense that there was a formal agency agreement or relationship as such.

180. [405]

     It is submitted that Ms Morton’s evidence that she did not have a conversation with Ms Anthony “by March 2002” in which Ms Anthony outlined the terms of the agency agreement as to her rate of commission and the duration of her entitlement to that commission lacks credibility and that it strains credibility that the terms of the agency agreement would be dealt with in such a perfunctory manner as Ms Morton suggests. I disagree. Ms Anthony’s own description of her conversations with authors suggests that Ms Anthony was not particularly formal in her dealings with them (and the description of this as perfunctory is not wholly inapt).

181. [406]

     Ms Anthony argues that the assertion by Ms Morton that she did not have the intention of submitting another manuscript to Ms Anthony until 2004 is at odds with Ms Wilkins’ evidence and Ms Morton’s own comments provided in an interview in 2012. She submits that it is quite feasible that the conversation did occur in March of 2002 (following the September 2001 rejection letter) (supporting this submission by reference to her evidence that Ms Morton was sending her segments of her manuscript as she wrote them). It is submitted for Ms Anthony that Ms Morton had commenced writing the third manuscript (which was to become Book 1) at some time between 2002 and early 2003; and that this provides an explanation as to why Ms Anthony was comfortable sending an unfinished manuscript to A&U (i.e., because it was not new, it had not been provided to her incomplete and it had been provided over a long period of time in which Ms Anthony had read the work of, and mentored, Ms Morton).

182. [407]

     Turning to Ms Morton’s submissions on this issue, Ms Morton points to the following in support of the submission that Ms Anthony’s evidence as to the alleged oral agreement in March 2002 should not be accepted.

183. [408]

     First, the various iterations of the basis of Ms Anthony’s claim both in the correspondence and the pleadings (to which I have referred above). Ms Morton notes that an entirely oral agreement was not alleged until the filing of the further amended statement of claim on 7 September 2016 and submits that it can be concluded that Ms Anthony invented the oral contract claim when she filed her statement of claim on 20 May 2016 (after months of disputation in which there was no reference to such a claim). It is submitted that the explanations given by Ms Anthony for the lack of reference to the alleged oral contract in the earlier communications and documents are implausible. It is further submitted that Ms Anthony’s explanation of having “agreements” with authors, and “contracts” with publishers (see T 129.25-129.42), was fanciful, particularly in light of her earlier claim to have had an “oral contract” (see T 120.30-47).

184. [409]

     Second, the differences in Ms Anthony’s affidavit evidence as to her recollection of the alleged conversation (both as to timing of the conversation and as to the language alleged to have been used in the conversation itself – in particular the omission of the expression “Agent of Record” in Ms Anthony’s affidavit). Third, the indistinct nature of Ms Anthony’s recollection of events (in particular, her inability to recall when she met Ms Morton, or when Ms Morton submitted manuscripts for consideration, or when Ms Morton began to work on her draft for Book 1). Fourth, the alleged incompleteness of the alleged March 2002 conversation to form a binding contract between the parties. Fifth, what is submitted to be the inherent improbability of such a conversation occurring either in September 2001 or in March 2002, having regard to the chronology of events set out above.

185. [410]

     Ms Morton argues that there were a number of key concessions on Ms Anthony’s part in the course of her cross-examination regarding the alleged formation of the March 2002 agreement.

186. [411]

     First, Ms Anthony’s concession that “[c]onversations can be remembered and forgotten” (see T 153.2-153.3) (and see also the cross-examination to the effect that Ms Anthony had trouble remembering conversations generally – T 88.25-88.28; T 94.43-94.47; T 95.26-95.28; T 139.1; Ms Anthony’s statement (at T 107.42) that the “years are all over the place” and her acknowledgement that it was impossible to remember conversations eight years ago (though she would not make the same concession in respect of conversations sixteen years ago – T 108.11-108.13).

187. [412]

     Second, Ms Anthony’s evidence in cross-examination as to her recollection of the date of the alleged March 2002 conversation (which it is said, though Ms Anthony denied that this was the case – T 142.20-142.25 – demonstrates the artificial specificity of the date of the alleged conversation); referring to the evidence at T 140.25-140.31; T 140.33-140.38; T 142.24-142.27; T 142.39-142.50 and noting the changes in the various iterations of the pleading (all verified by Ms Anthony) as to the timing of the conversation.

188. [413]

     Third, Ms Anthony’s acknowledgement that she could not remember the words of the alleged March 2002 conversation, or any conversation with, Ms Morton (see T 141.3-141.8; and her insistence that “I know how the conversations go and I said it to you a few times” at T 143.9); and her evidence said that what she said in her sworn pleadings and affidavit evidence is “close to what I say to each and every one of my authors, Ms Morton was no different” (see T 141.6-141.7) (in which respect Ms Morton argues that Ms Anthony’s evidence was not consistent in any event). Ms Morton notes that, when challenged as to whether it was false to claim, as she had done in her pleadings and affidavits, that she actually remembered the conversation, Ms Anthony’s response was “not really” (see T 143.11-143.15). (Pausing there, in general Ms Anthony’s affidavit evidence adopted the common formulation “words to the effect”, when recounting conversations – so an inability to recall precise words does not of itself render those accounts false.)

189. [414]

     Fourth, Ms Anthony’s use of the expression “agent on the record” (or “Agent of Record”) in the pleading (to which I have already referred), that being an expression which Ms Anthony says was just something “thrown” at her for the last three years (see T 145.1-145.5); and Ms Anthony’s concession that she probably did not say the word “record” (see T 141.3-141.17; T 144.18-144.25); and that she had never heard of this expression in 2002, rather that she learnt it “later on”, as it had “come to [her] from the new agent” (see T 144.37-144.40). In this regard, Ms Morton notes that Ms Anthony disagreed with the proposition that the verified particulars were false, saying that it was “a mistake” (see T 144.45-144.49).

190. [415]

     Fifth, the omission from Ms Anthony’s first affidavit account of the alleged March 2002 conversation (at [20]) of reference to the ongoing commission term as verified in the particulars to the pleading (there the conversation is recorded as including that “However, I still receive my commission for each of the contracts negotiated for the life of the work”).

191. [416]

     Sixth, that Ms Anthony, in her second affidavit, did not dispute Ms Morton’s evidence that there was no reason for Ms Morton to speak to Ms Anthony on the telephone in March 2002 (though in cross-examination Ms Anthony did disagree with this (see T 152.50-153.4)).

192. [417]

     Seventh, the conflicts in Ms Anthony’s evidence as to her recollection of the alleged September 2001 conversation (see T 150.11-150.14; T 153.32-37 although possibly that is intended to be T 153.44-153.46; T 154.4-154.6; T 154.14-154.19; T 155.10-155.31; T 156.6-156.7).

193. [418]

     As to the allegation based on a contract, or contractual term, implied by conduct, Ms Morton submits that it is essential for Ms Anthony to prove the conduct from which the term can be inferred (referring to Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 at [5]-[9] per Macfarlan JA) and submits that Ms Anthony has failed to do so. It is noted that the character and circumstances of the conduct must indicate unambiguously that the parties intended to contract (Brogden v Metropolitan Railway Co (1877) 2 App Cas 666) and the conduct must not only point to the existence of a contract but also to the existence of the contract in the terms alleged in the proceedings.

194. [419]

     Ms Morton points to what was said by McHugh JA in Empirnall Holdings Pty Ltd v Machon Paull (1988) 14 NSWLR 523 at 535, namely that: “[t]he ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signaling to the offeror that his offer has been accepted”.

195. [420]

     In the present case it is submitted that Ms Anthony has failed to prove any conduct during the agency period from which it could be inferred that any alleged right to commission lasted beyond the term of the agency; nor any conduct during the agency period that would enable the inference to be drawn that the parties intended Ms Anthony to continue to act as agent after termination of the agency.

196. [421]

     Ms Morton argues that there is no post-termination conduct between the parties capable of impliedly forming any agreement as to the continuation of Ms Anthony’s entitlement (pointing to the cancellation by her solicitor of the payment direction to each of the publishers). It is submitted that the communications between Ms Morton’s new agent, Ms Kremer, and Ms Anthony, illustrate beyond doubt that Ms Morton did not authorise Ms Anthony to continue to act as agent for Ms Morton’s books.

197. [422]

     Insofar as it was put to Ms Morton in cross-examination that the offer made by her new agent, Ms Kremer, from DHA, was prompted by Ms Morton’s belief that Ms Anthony was entitled to ongoing 15% commission on Ms Morton’s Books 1 to 6 for the life of the work, it is submitted that there is no reason to doubt Ms Morton’s explanation for the offer, namely that she wanted to end things “amicably” with Ms Anthony and move on (see T 286.26). It is submitted that Ms Morton’s evidence that she “was in a state of alarm having discovered how disadvantageous the agreements Selwa had recommended to [her] with Allen and Unwin were, and [her] priority was moving on and renegotiating those as quickly as possible” (see T 285.12-285.13; T 286.26) was credible. Ms Morton said that she wanted to end things “quickly, privately and move on, and this was an offer that [her] new agent had made. [Ms Kremer] said, ‘I’m happy to split the commissions’” (see T 285.30-285.32).

198. [423]

     The relevance of the timing of the introduction of Ms Morton to Ms Anthony (and, more particularly, any discussion as to the terms on which Ms Anthony would be prepared to act as Ms Morton’s agent), apart from indicating some unreliability in respect of Ms Anthony’s recollection of dates, goes to the plausibility or otherwise of Ms Morton entering into an agency arrangement as at around March 2002. In Ms Anthony’s evidence in cross-examination on this topic, at various times her position appeared to be that she had no recollection of negotiating the terms of the agency agreement, or the commission rates, before 2002 (see T 150.11-150.14; T 153.44-153.46). Certainly, it is clear from Ms Anthony’s cross-examination that Ms Anthony has no actual recollection of the alleged March 2002 conversation (and is basing her account of this conversation on the fact that she says it so often – to every author – see T 141.50).

199. [424]

     I find, particularly by reference to the HarperCollins rejection letter of 28 September 2001 (and Ms Anthony’s acceptance that Ms Anthony attended her Sassy Awards event in November 2000), that Ms Morton’s first introduction to Ms Anthony had occurred at least by the end of 2000 and that the sending by Ms Morton of her first two (still unpublished) manuscripts to Ms Anthony had occurred by around August 2001.

200. [425]

     I find that there was no discussion between Ms Anthony and Ms Morton at that stage (i.e., in the period 2000 to 2001) as to the terms on which Ms Anthony would be prepared to represent Ms Morton (and certainly no discussion at that stage as to an ongoing commission entitlement of the kind now pleaded). Apart from the general reference in her later affidavits to discussions in the course of 2001, Ms Anthony’s case was pleaded on the basis of a conversation in or around March 2002 and she did not point to any particular occasion earlier than that on which it would make sense to think that there would have been discussion as to the terms of any agency relationship that might or might not eventuate in the future.

201. [426]

     As to whether there was such a discussion in 2002, Ms Morton’s argument is that it makes no sense for this to have occurred in 2002, when she was pregnant with her first child and when, she says, she was not writing (novels as opposed to anything else).

202. [427]

     Allowing for the difficulties that are well-recognised in the recollection of conversations and events occurring many years ago (see Watson v Foxman (1995) 49 NSWLR 315), I find more plausible Ms Morton’s account of the time at which she commenced writing what in due course became her first published novel than Ms Anthony’s account of that timing. This is not only because it seems to me implausible that Ms Morton, only shortly after the rejection of her previous (second unpublished) manuscript and while she was in the throes of completing her Master’s thesis, would also have been embarking on the writing of a third manuscript but also because Ms Wilkins’ recollection places the discussion about “ideas” for that manuscript at the time of Ms Morton’s pregnancy and during the winter (which, given a July 2003 birth, would seem to put the discussion more likely as occurring in the winter of 2003 and is closer to the timing Ms Morton attributes to the commencement of writing – the summer of 2003/2004, than the account given by Ms Anthony in her first affidavit – of late 2002). I also note in this regard that the first chapter of the draft manuscript for “The Shifting Fog” appears only to have been emailed to Ms Wilkins on 6 May 2004 (see Exhibit 8, CB 7/2102). Although it is possible that this draft could have been sent to Ms Anthony before it was sent to Ms Wilkins it still makes unlikely the suggestion that segments of the manuscript were being sent to Ms Anthony at a much earlier time.

203. [428]

     I accept that there is some inconsistency with the account of events attributed to Ms Morton in the 2012 newspaper article to which Ms Anthony refers (see [406] above) but Ms Morton’s account of the timing in this regard is nevertheless broadly consistent with what was attributed to her in the newspaper article (albeit that this puts the commencement of writing as during the pregnancy rather than during the six months after the birth of her first child). I attribute more weight to Ms Morton’s affidavit evidence on this issue than to the accuracy of a newspaper account of what was said to have been said by Ms Morton in an interview some years after the event.

204. [429]

     As to the references in Ms Morton’s online post in 2006 to Ms Anthony having been her agent for a period of time spanning back before 2002, I do not consider Ms Morton’s evidence (that, considered “retrospectively”, this was correct) to be disingenuous. As indicated earlier, it reflects the distinction between an informal agency relationship (in the sense of Ms Anthony being someone to whom Ms Morton felt she could send her work for review and/or comment) and an agency agreement as such.

205. [430]

     I am not satisfied on the balance of probabilities that there was an oral conversation between Ms Morton and Ms Anthony as early as March 2002 in the terms contended by Ms Anthony or as to the terms of any agency agreement at all. There is no logical reason for such an agreement to have been struck (or even discussed) at that stage if, as I have found was the case, Ms Morton had not then commenced the preparation of her third manuscript (which later became Book 1) beyond jotting down some notes or ideas.

206. [431]

     Ms Anthony’s recollection of the conversation as at that time was not consistently expressed and is not in my opinion reliable. It seems more likely to be a product of reconstruction (conscious or otherwise) some years after the real agency relationship between the two (i.e., something more than Ms Anthony being someone to whom Ms Morton could send her work) was formed (which I consider to have been not earlier than the time that the partial manuscript was sent by Ms Morton to Ms Anthony in the second half of 2004 and on-sent by Ms Anthony to A&U in early 2005). I say that also in part because Ms Anthony’s evident understanding of her entitlements as agent to commission is that it was tied to her Agency Clause in the publishing agreements she put forward to A&U. The first of those agreements was not negotiated until 2005.

207. [432]

     I have concluded that it is far more likely that any discussion as to the terms on which Ms Anthony would act as Ms Morton’s agent did not take place until after the manuscript for “The Shifting Fog” manuscript was submitted to A&U (and, indeed I think it is most likely that there was no such discussion until after the offer of publication was received). I also find, on the balance of probabilities, that any discussion at that time (i.e., in 2005) was relevantly limited to the rate of commission that Ms Anthony would deduct from advances (and/or royalties) received from the publisher(s) (see [434] below).

208. [433]

     As I set out in answer to Issue 2 below, I am unable to accept that any discussion between Ms Morton and Ms Anthony in 2005 as to the 15% commission which Ms Anthony would take extended to a discussion as to that commission entitlement continuing beyond the term of the agency relationship as such. What is abundantly clear is that Ms Anthony cannot have used the expression “Agent of Record” or anything like that expression either back in 2002 (as she alleged in her pleading) or in 2005, since she had not heard that expression until it was “thrown” at her during the course of these proceedings. In the various versions of the conversations deposed to by Ms Anthony (though not by any means accepted by Ms Morton) there is reference to Ms Morton being free to leave at any time and there being an entitlement for the life of the works. What is left unexplained (even on Ms Anthony’s account of the conversations) is how such an entitlement was to work in practice, namely whether the commission was linked to the particular publishing agreements which had been negotiated by Ms Anthony and, if not, how the commission was to be payable in respect of royalties earned on new publishing contracts. (I note that it was submitted that Ms Anthony would reap a windfall if 15% commission were to be payable on the new publishing contracts but it is not necessary here to determine that issue, given the conclusions I have reached on the contractual claim.)

209. [434]

     Thus I find that it was not until May 2005 that an agreement (constituted by conduct) came into existence to the effect that Ms Anthony was entitled to commission of 15% (this agreement being constituted by Ms Anthony’s statement that she took 15% commission and Ms Morton’s acceptance, by her conduct thereafter, of that arrangement); and that the agreed commission initially related to advances (but also, although Ms Morton says this was not discussed at the time, came to encompass royalties – since Ms Morton did not ever demur from the deduction of 15% commission in relation to royalties once the advances were earned out) payable under the publishing agreements that were negotiated by Ms Anthony.

210. [435]

     Strictly speaking, this issue does not arise since I have found that there was no oral agreement, as alleged, as at March 2002. However, I have found that there was an agency agreement constituted by conduct in 2005 and therefore the question as to the terms of that agreement (and particularly whether they included a right to ongoing commission) fall for consideration.

211. [436]

     Ms Anthony argues that it is undisputed that, by 2005 at least (though on her pleaded case it was before then), it was an express term of the agency agreement that she was entitled to 15% commission. There is no dispute as to that rate of commission then having been agreed, or at least accepted by Ms Morton by her conduct, and, as indicated above, I make a finding to that effect.

212. [437]

     It is submitted for Ms Anthony that the terms of the agency agreement as contended for by her are clearly evident in and consistent with the subsequent conduct of Ms Anthony and Ms Morton over a ten year period: namely, that Ms Morton submitted manuscripts to Ms Anthony; that Ms Anthony negotiated the A&U publishing agreements for those manuscripts (Books 1 to 6); that Ms Morton’s earnings on the publication of the books (including advances on royalties) were paid by A&U to Ms Anthony pursuant to the Agency Clause in each of the publication agreements; and that Ms Anthony deducted her 15% agent’s commission from the payments and remitted the balance to Ms Morton. That conduct, however, says nothing as to any ongoing commission entitlement beyond the term of the agency arrangement.

213. [438]

     Reliance is placed by Ms Anthony on Ms Morton’s conduct (both directly and through her new agent, Ms Kremer) in December 2015 in terminating the agency agreement with Ms Anthony as being consistent with a clear understanding on Ms Morton’s part that the agreement with Ms Anthony entitled Ms Anthony to 15% commission on Ms Morton’s earnings on Books 1 to 6 for the life of those books; and that this entitlement survived termination of the agency agreement and termination of the A&U publishing agreements.

214. [439]

     It is submitted that it must have been clear to Ms Kremer and DHA (and to Ms Morton) at this time that they would only have been entitled to any agent’s commission on Book 7 (which Ms Morton had not yet commenced writing) if they could convince Ms Anthony to forego some of her agent’s commission entitlements on Books 1 to 6. It is submitted that:

215. [440]

     Pausing there, it is not clear to me the basis on which it is submitted that Ms Kremer and DHA would only be entitled to commission for Book 7 if Ms Anthony could be persuaded to forego some of her commission entitlements on Books 1 to 6. There appears to be a suggestion that Ms Anthony had by then negotiated a publishing contract in respect of Book 7. However, that is not established on the evidence and on any view of the matter no such publishing contract (i.e., one negotiated by Ms Anthony) was signed by Ms Morton with A&U in relation to Book 7 (whether before or after the termination of Ms Anthony’s agency relationship with Ms Morton). The publishing agreement for Book 7 was ultimately negotiated by Ms Kremer (and was strikingly different in content; though, due to confidentiality concerns, I say no more here than that it did not encompass world licensing rights).

216. [441]

     Certainly, Ms Anthony has never asserted a right to commission in respect of Book 7 (and the lack of any such entitlement is acknowledged in her submissions – see [442] below). Hence (other than if this was an issue in the commercial negotiations between Ms Morton and Ms Kremer – and there is no evidence to suggest that it was) the suggestion that it was in some way necessary for Ms Morton to commit a breach of the alleged agency agreement with Ms Anthony for Books 1 to 6 in order to be in a position to enter into a new agency agreement with Ms Kremer or DHA for Book 7 makes no sense.

217. [442]

     Returning to Ms Anthony’s submissions, she points to the fact that the offer by Ms Kremer was open-ended as to timing and that it offered, as an additional inducement to Ms Anthony to forego some of her entitlements (i.e. half of her ongoing commission on Books 1 to 6), something to which Ms Anthony was not entitled (1.5% of Ms Morton’s earnings on Book 7). It is submitted that these factors point unequivocally to Ms Morton understanding the terms of her agency contract with Ms Anthony in the terms claimed by Ms Anthony.

218. [443]

     Further, it is submitted that if I were not satisfied that it was also an express term of the agreement that Ms Anthony was entitled to commission at this rate on Ms Morton’s earnings from Books 1 to 6 for the life of those books (and that this entitlement survived termination of the agency agreement between Ms Anthony and Ms Morton and the termination of the publication agreements for those books negotiated by Ms Anthony with A&U), I would nevertheless be satisfied on the balance of probabilities that this was an implied term of the agency agreement between Ms Anthony and Ms Morton (Ms Anthony here relying on the principles outlined in Yulema Pty Limited v Simmons).

219. [444]

     It is submitted by Ms Anthony that the alleged implied term is reasonable and equitable as it is consistent with Ms Anthony’s business practice and with industry practice, and with fair remuneration of the agent by the author; and that it can be clearly understood. It is further submitted that it is necessary to give business efficacy to the contract of agency. Ms Anthony argues that unpublished authors approach agents with no guarantee of publication and that agents assume the risk of expending time and effort to secure publication contracts for such authors with no guarantee of payment and publication. It is submitted that an agent’s contract would be untenable and ineffective without such a term, especially in relation to a new or early career author. It is further submitted that it would be inefficacious if the agent’s entitlement to commission could peremptorily be undone by an author terminating an agency agreement, or by an author and a publisher “perhaps in league with a new agent seeking a share of the author’s backlist royalties”, terminating publishing agreements negotiated by the first agent on behalf of the author. It is submitted that such a term is so obvious it goes without saying and is capable of clear expression (as it is said it was with Ms Anthony, who recited it “parrot-like” to all her authors). It is also submitted that it does not contradict any express term of the agency contract.

220. [445]

     Ms Morton disputes that there was an express agreement for the payment of commission beyond the term of the agency agreement (and I have referred to her submissions in that regard above in the context of Issue 1).

221. [446]

     As to the claim based on implication of a term by reference to custom and usage, Ms Morton argues that it is vital for the Court to know to what extent the proposed custom has been accepted by the parties who would not naturally favour the establishment of the proposed custom (in this case, the author) (see Stag Line Ltd v Board of Trade [1949] 83 LIoyd’s Law Rep 356 at 359).

222. [447]

     It is submitted for Ms Morton that Ms Anthony gave no evidence of widespread uniform custom in support of her claim and that the only evidence which might arguably be considered to be evidence of custom was limited to instances of written agency agreements that contain a specific term to this effect. Ms Morton further notes that the usual term in the written agreement was limited to commission on the publishing agreements actually negotiated by the literary agent.

223. [448]

     Ms Morton contends that Ms Anthony has failed to discharge her onus because the evidence upon which she relies does not show that there is any custom in the absence of an express agreement to the terms alleged. In particular, it is submitted that Ms Anthony has failed to adduce any evidence from any author who, in the absence of express agreement, knew that such a term was notorious and would be imported into their agency agreement without notice or consent; and that there is no evidence of the widespread awareness of authors or agents that, in cases where the matter was not expressly agreed or discussed, the agent would continue to be entitled to 15% commission for the life of the works on books for which it had obtained an agreement. It is further noted that there is no evidence of the number of agencies terminated before March 2002 where, as a matter of custom and not express agreement, the authors continued to pay their agents commission after termination.

224. [449]

     Apart from the complaint as to insufficiency of evidence, Ms Morton argues that the alleged terms are unreasonable (in that, as propounded, there would be a right to deduct commissions for the life of a work even if Ms Anthony’s services were to be terminated for breach of contract, negligence or breach of fiduciary duty) and inconsistent with the fundamental nature of the agency contract and the agent’s fiduciary obligations (which require disclosure of terms material to the agency). Thus it is submitted that the terms alleged are unreasonable and will not be implied by the Court, absent a finding that Ms Morton knew of, and consented to the custom (referring to Robinson v Mollett (1875) LR 7 HL 802). Ms Morton’s case is that she has never given her consent to such terms. It is submitted (and there was no demur therefrom) that it was not put to Ms Morton in cross-examination that she knew it was the custom and had consented to it.

225. [450]

     Ms Morton submits that a court will be especially wary where the alleged custom is the agent’s creation or to the agent’s advantage, referring to what was said in Robinson v Mollett at 829 by Cleasby B to the effect that the rule that agents cannot act so as to bind their principals where they have an adverse interest in themselves “cannot be defeated by a usage, or ... a lax practice of brokers, which is plainly of their own creation for their convenience and advantage in the settlement of speculative dealings”; and to Thornley v Tilley (1925) 36 CLR 1 at 19; [1925] HCA 13, where Higgins J observed that “[i]t is surely not too much to say that if a broker want[s] to get the profits from sales of shares as well as his interest and commission he ought to make an express stipulation to that effect”.

226. [451]

     Further in answer to the whole of the contract claim, Ms Morton submits that even if Ms Anthony succeeded in proving a contract on the terms alleged, there is no legal basis for her now to claim ongoing commission. It is submitted that the contract claim suffers from the fundamental flaw that an agent’s entitlement to commission is dependent upon performance of the services that have been promised in the agency agreement (citing Peter Watts and FMB Reynolds, Bowstead & Reynolds on Agency (21st ed, 2018, Sweet & Maxwell) at 7-013, Article 56) and hence that Ms Anthony is only entitled to ongoing payment of commission if the right to payment accrued prior to termination (such that Ms Anthony became entitled to a “trailing commission”).

227. [452]

     As to the first of those propositions, Ms Morton submits that there is no dispute that the agency was terminated (referring to the pleading in the further statement of claim at [21]; the amended defence thereto at [21]; Ms Anthony’s third affidavit at [4]; Ms Morton’s first affidavit at [8]). She submits that in circumstances where Ms Anthony has not performed the work of an agent since 10 December 2015 she is prima facie not entitled to a commission she has not earned.

228. [453]

     Insofar as the allegation is that Ms Anthony was entitled to remain “the agent on the record for the life of each work” (which Ms Morton says – and I accept - does not appear to be a term of art in the publishing industry), it is submitted that this appears to be a claim that, at least with respect to any existing publishing agreements, Ms Anthony was contractually entitled to continue to act as agent. Ms Morton notes that an agency agreement is a contract for personal services and such a contract is terminable unless the agent is expressly given an irrevocable authority to secure a relevant interest of the agent in the exercise of his or her authority (citing Angove’s Pty Ltd v Bailey [2016] UKSC 47 at [7]). It is submitted that Ms Anthony cannot establish that she has an irrevocable authority to remain as the “Agent of Record” because she does not allege, nor can she prove, that she had any relevant interest in the exercise of her authority, being either a proprietary interest or a liability owed to her personally; and that a commercial interest in earning a commission does not suffice.

229. [454]

     As to whether, on the proper construction of the alleged agency agreement, Ms Anthony was entitled to a trailing commission, Ms Morton submits that to succeed on such a claim, Ms Anthony would need to plead and prove that, as a matter of the proper construction and performance of the contract, the right to payment accrued prior to termination (referring to Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (1936) 54 CLR 361; [1936] HCA 6).

230. [455]

     It is submitted that both parties’ evidence positively supports a finding that, on the proper construction of the agency agreement, Ms Anthony received commission for ongoing agency services (citing Ms Darling’s report at [2]; [76](a), (b), (d), (e), (i), (g); Ms Martyn at [76]) (i.e., not simply for finding a potential publisher or introducing the contracting parties or obtaining the initial world rights publishing agreement – cf. Macnamara v Martin (1908) 7 CLR 699; [1908] HCA 86)). It is submitted that the ongoing management services provided by an agent (such as managing the publishing agreements and monitoring the international licences, sales and payments) is a critical part of the agency agreement and, therefore, as at the time of termination it could not be said that Ms Anthony’s right to remuneration had unconditionally accrued.

231. [456]

     Ms Morton submits that the only reasonable inference available is that, on the proper construction of the contract, literary agents receive one commission, paid periodically, for the performance of the whole of their work and that a literary agent’s contract may therefore be described as an entire contract, meaning “one in which, or in relation to which, the consideration for the payment of money is entire, indivisible and not severable” (citing GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1 at 164-165; [2008] FCA 50 (Finn J)). Thus it is submitted that Ms Anthony cannot claim the whole of the commission in return for the performance of part of the work. (Nor, it is submitted, could the commission be arbitrarily divided into a notional upfront “commission” and separate “management fee” as that would fundamentally change the basis of the payment term and amount to an impermissible re-writing of the agreement between the parties – see Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109; [1973] HCA 36.)

232. [457]

     In that regard, Ms Anthony argues that reliance cannot be placed on the fact that she has not been performing any duties as agent since January 2016 because that was due to Ms Morton’s conduct in terminating the agency agreement.

233. [458]

     It is ultimately not necessary to determine the arguments in answer to the whole of the contract claim canvassed at [451]-[457] above, having regard to the conclusion I have reached that Ms Anthony does not have a contractual entitlement to commission beyond the termination of the agency relationship between Ms Anthony and Ms Morton. I simply note that the only sensible ways that I can see that one could reconcile the proposition that Ms Morton was free to leave Ms Anthony’s agency at any time and the proposition that Ms Anthony was still contractually entitled to commission on royalties earned from the publication of Ms Morton’s first six books for the life of each work (both of which propositions are maintained by Ms Anthony) would be: either to treat the agency agreement as surviving the termination of the agency relationship; or to treat any contractual entitlement to ongoing commission as a term surviving termination of the agency agreement (akin to a clause imposing a confidentiality obligation being expressed to survive termination of the agreement in which it is contained, which is understandably often the case in employment agreements or the like). An irrevocable direction in the publishing agreement for payments to be made to Ms Anthony would not of itself suffice since Ms Anthony is not a party to the publishing agreement (though conceivably if Ms Morton had somehow bound herself to Ms Anthony not to change that direction then there might be a basis on which that promise could be enforced).

234. [459]

     That difficulty was not satisfactorily grappled with in Ms Anthony’s case. Nor was the difficulty of how, in circumstances where the royalty structure has now been renegotiated, Ms Anthony could maintain an entitlement to 15% commission of royalties payable under the new negotiated agreements which are more favourable than those under the contracts previously negotiated by her (which it was submitted would confer a windfall on her – see T 450.5ff) and under which the royalty is not payable to Ms Morton. The position for Ms Anthony, as explained by Senior Counsel in submissions, was that Ms Anthony was not running a case that the claim goes up to but not beyond termination of the publishing agreements (see T 16.28); or, removing the double negative, that on case the commission entitlement goes beyond the termination of the publishing agreements.

235. [460]

     I am not satisfied that the oral agency arrangement or agreement between the parties (whether it was formed in March 2002 as Ms Anthony contends or, as I have found to be more likely on the balance of probabilities, after entry into the time of the first A&U publishing agreement which evidenced such a relationship and the acceptance by Ms Morton, by her conduct, of Ms Anthony’s deduction of commission) was in the terms contended for (particularly as to the alleged ongoing entitlement to commission if Ms Morton were to leave the agency). I think it far more likely, given Ms Anthony’s evidence (and, were it to have been admitted, the evidence of her dealings with other client authors would support this) that the basis on which she acted as agent for Ms Morton over the years was something that developed “incrementally”, as Ms Morton described it (see T 240.29).

236. [461]

     I have concluded that the evidence by client authors of their agency arrangements with Ms Anthony is not admissible but even if it had been it would not have established a uniform practice from which I could have concluded that it was more likely than not that Ms Anthony’s arrangements with Ms Morton included the ongoing commission term for which Ms Anthony contends.

237. [462]

     I accept that there was a course of dealing between Ms Morton and Ms Anthony from 2005 onwards from which it can be concluded that Ms Anthony was entitled to deduct 15% commission from gross amounts payable to Ms Morton by way of both advances and royalties. Although Ms Morton was adamant that she was not told about commission on royalties (as opposed to advances) it is clear that, over the period up to 2015, Ms Anthony’s practice once the advances had been earned out was to deduct commission from the subsequent royalty payments and there was no demur from Ms Morton as to this practice.

238. [463]

     I am, however, not persuaded on the balance of probabilities that the agency arrangements between Ms Morton and Ms Anthony included any acceptance by Ms Morton that Ms Anthony would be entitled to commission after termination of the agency agreement (or after Ms Morton left the agency). While there was evidence (which Ms Morton disputed) by Ms Wilkins to the effect that the latter had told Ms Morton that the 15% commission was “forever”, there is no basis for concluding that Ms Wilkins was Ms Anthony’s agent or able to commit Ms Anthony to any particular contractual terms; and 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.

239. [464]

     There certainly cannot have been a reference to Ms Anthony remaining an “agent of record” after termination of the agency relationship (as the pleading averts) because Ms Anthony had not heard the term until the commencement of the present proceedings. There was confusion in Ms Anthony’s case as to whether the claimed arrangement was for ongoing commission “for the life of the work” linked to the subsistence of the publishing agreements negotiated by Ms Anthony or at large (and if the latter there is doubt as to how that could have operated with any certainty in practice).

240. [465]

     Accepting that there was an agreement (evidenced by a course of dealings over the years and the nomination of Ms Anthony as Ms Morton’s agent in the A&U publishing agreements) to the effect that Ms Anthony would represent Ms Morton and would act as Ms Morton’s agent, and that Ms Anthony would be entitled to deduct 15% commission on the amounts payable to Ms Morton by way of both advances and royalties, and having concluded that on the balance of probabilities there was no express oral agreement to the effect that there would be an ongoing entitlement to commission for the life of the work notwithstanding either the termination of the agency relationship (or agency agreement) or the termination of the publishing agreements negotiated by Ms Anthony, the question is then whether there was a term implied in the arrangement to that effect: first, as a matter of fact; second, by reference to custom and usage in the industry; or third, by a course of dealing.

241. [466]

     As to the implication of such a term as a matter of fact, I have concluded that no such term was necessary for the business efficacy of the arrangement between agent and author. An ongoing commission term certainly might be commercially desirable for an agent, and capable of avoiding outcomes adverse to the agent’s financial interests, but that is not the test. As was said in The Moorcock (1889) 14 PD 64 at 68 by Bowen LJ, “[i]n business transactions such as this, what the law desires to effect by the implication is to give such business efficacy to the transaction as must have been intended at all events by both parties who are business men” (my emphasis). I am not persuaded that, had both parties been asked about the existence of the ongoing agency commission term in about 2005, they would have regarded it as clearly part of their agreement. Nor is the term so obvious as to have gone without saying (which again is an indicator of the presumed intention of the parties, that forming the foundation for the implication of a contractual term – see BP Refinery (Westport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 283; 286; 16 ALR 363 (Privy Council)).

242. [467]

     As to the implication of such a term by reference to custom and usage in the industry, first, the evidence as to industry practice was ultimately to the effect that the existence of an ongoing commission term depends on the terms of the contractual arrangements between author and agent (which begs the question in the present case); and, second, it certainly could not be said that such a term was so well-known in the industry that Ms Morton (an unpublished author back in 2002) should be assumed to have known about it (since even those then in the publishing industry did not see it as a uniform practice outside the scope of the parties’ agreement in a particular case) and, still less, to be taken to have accepted it. As noted, apart from Ms Anthony’s evidence as to the disputed conversations (which I do not find reliable), there is only the (again, disputed) conversation to which Ms Wilkins deposes to suggest that Ms Morton was on notice that Ms Anthony’s practice might be for there to be commission for the life of the work (or “forever”); and nothing to indicate what a reasonable person in Ms Morton’s position would have understood by this.

243. [468]

     As to the course of dealing, this issue did not have any occasion to arise during the course of the agency relationship between the two because there was no previous termination of the relationship which could have given rise to a conclusion (from whatever then transpired) as to an acceptance of such a term. Instead, the immediate reaction of Ms Morton when she terminated the agency relationship and the issue was raised was to deny an entitlement to ongoing commission.

244. [469]

     As to the last point, I do not accept that the offer communicated by Ms Kremer to Ms Anthony was one that should be concluded to have been made in her capacity as Ms Morton’s new agent; even if it was, I do not accept that it amounts to an admission by Ms Morton that Ms Anthony was entitled to ongoing commission. True it is that it refers to the protection of Ms Anthony’s income – but whether that should be understood to mean the protection of something to which Ms Anthony was contractually entitled or simply to ensure that Ms Anthony would receive an income stream is not clear.

245. [470]

     I have thus concluded that there was no term of the agency arrangement or relationship between Ms Anthony and Ms Morton to the effect contended for as to an ongoing entitlement to commission beyond the end of the agency relationship or “for the life of the work”.

246. [471]

     In reaching that conclusion, the difficulty of articulating how such a term would work in practice goes to the unlikelihood that Ms Anthony would have been able to explain such a term to Ms Morton with sufficient clarity for it to be a term of their arrangement let alone one to which Ms Morton agreed. In particular, I note the uncertainty (and inconsistent expression) of the claimed entitlement to ongoing commission (as to whether it relates to commission earned under publishing agreements negotiated by Ms Anthony, which would come to an end once those publishing agreements were validly terminated, or to commission earned by Ms Morton in relation to the sale of the books for the life of those works, whoever be the publisher and under whatever publishing arrangements may then be in place); and as to what was to happen if (as has happened here) Ms Morton were to assign copyright in the books such that no further royalties were earned by her (as opposed to Nightofficer) in respect of the sale of the books for the remainder of the life of the works.

247. [472]

     As I have stated above, I am not persuaded that there was an oral agreement between Ms Anthony and Ms Morton which contained a term entitling Ms Anthony to ongoing commission after the termination of the agency relationship between her and Ms Morton (however that term might have been expressed – i.e., as an entitlement to commission for the life of the works or an entitlement to commission earned under the publishing agreements negotiated by Ms Anthony in relation to the works). The practical difficulties arising out of the operation of such a term in the circumstances of the present case do not therefore arise; they simply point to the difficulty in finding that there was a binding agreement to that effect at all.

248. [473]

     As noted above, in 2016 and 2017 Ms Morton effected changes in her publishing arrangements, and in addition, certain publishing agreements have expired in accordance with their original terms since 2015. In her amended defence (at [38]) Ms Morton contends that, following those events, even if it were to be found that Ms Anthony was entitled to commission on royalties after termination of the alleged agency agreement, any such entitlement must be limited to commissions derived from the six A&U publishing agreements which were terminated on 9 January 2017; and the original audio publishing agreements with Bolinda which have either expired or been terminated (and noting that the large print contracts with Center Point Inc have expired).

249. [474]

     It is submitted that Ms Anthony has no right to commission on royalties earned under the 9 January 2017 agreement between Nightofficer and A&U; nor under the seven new agreements entered into with Bolinda on 8 March 2017. It is noted that Ms Anthony’s claim is limited in her pleading to commission on the publishing agreements she recommended (or negotiated) (see the particulars to [8] of the further amended statement of claim).

250. [475]

     It is thus submitted by Ms Morton that if Ms Anthony were to be entitled to commission after the termination of the agency agreement, the Nightofficer Agreement has the effect of capping Ms Anthony’s alleged loss to a maximum amount of $211,770 (see CB 5/1953 at [8]).

251. [476]

     Ms Anthony’s submission in response (limited to the effect of the purported termination of the A&U publishing agreements) is that even if the contracted term of entitlement to commission on Books 1 to 6 does not survive termination of the six publishing agreements between A&U and Ms Morton, those publishing agreements were not validly terminated by the 9 January 2017 agreement between Nightofficer and A&U (or, at the very least, that there is insufficient evidence to establish that they have been validly terminated).

252. [477]

     Ms Anthony points to the lack of evidence of any proprietary interest of Nightofficer in copyright in Books 1 to 6 prior to its entry into the Deed of Assignment with Ms Morton on 13 June 2017 (by which copyright in Books 1 to 7 was assigned to Nightofficer). It is submitted that this deed, whatever its effect, was not retrospective in its operation and contradicts the submission made on behalf of Ms Morton that Nightofficer had the authority to enter the publishing agreement with A&U on 9 January 2017. Ms Anthony argues that any submission that Nightofficer was so authorised should be rejected.

253. [478]

     Ms Morton gave evidence (which could not be tested by reference to the document to which she referred as there was no copy in evidence) that NIghtofficer had authority to enter into the agreement with A&U – see T 294.31ff. (An unexecuted copy of what was said to be the final version of the document conferring on Nightofficer authority to enter into contracts for Books 1 to 6 was said to have been provided to Ms Anthony’s representatives, after a call for the document had been made, but was not sought to be tendered – see T 447.18ff.)

254. [479]

     Turning first to Ms Anthony’s submissions as to the status of the A&U agreements, I do not accept the submission that the memorandum of agreement dated 9 January 2017 between Nightofficer and A&U was not effective to terminate the respective then existing publishing agreements as between Ms Morton and A&U. Ms Morton clearly had knowledge of the execution of the 9 January 2017 agreement since she signed it in her capacity as director of Nightofficer. The agreement itself acknowledges that copyright in the works subsisted in Ms Morton. The only reasonable inference is that insofar as the agreement provided for the termination of her publishing agreements with A&U she had authorised Nightofficer to enter into the agreement effecting that termination on her behalf and with her authority to do so. If so, the agreement will bind Ms Morton (see generally Freeman and Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480).

255. [480]

     The submission that there was no actual authority by reference to the fact that an assignment of copyright was not made until 13 June 2017 goes to the question whether Nightofficer was in a position to confer the new publishing rights on A&U as it did under the agreement. That submission is unpersuasive given that Ms Morton clearly adopted the arrangements provided for under that agreement (and for present purposes the issue is not whether the new publishing rights were validly conferred on A&U but whether the then existing publishing agreements had been validly terminated by or with the authority of Ms Morton). The emphasis placed by Ms Anthony on the label attributed to Nightofficer as “Proprietor” is not to the point – it is clear that this is used as a definition or descriptive label only; and has no operative effect. (NIghtofficer could have been defined as “Mickey Mouse” for all the difference that would make.)

256. [481]

     It is relevant to note that there appears to have been no suggestion by either A&U or Ms Morton to the effect that the 9 January 2017 agreement was not effective to terminate the then existing A&U publishing agreements (and, indeed, A&U was anxious to maintain the confidentiality of those agreements. Nor has Ms Morton challenged the ability of Nightofficer to enter into the new publishing agreements (rather, she maintains that Nightofficer was contractually licensed to do so). The new arrangements put in place through Ms Kremer appear to have been operative since January 2017 – by reference to the commission base struck in the agreement later signed between Ms Morton and DHA. It seems clear that, since January 2017, A&U and Ms Morton have been conducting themselves on the basis that the prior agreements have been validly terminated. The subsequent course of events points to an acceptance as between Ms Morton and A&U by their conduct that the previous publishing agreements are no longer operative (and it is difficult to see why the subsequent course of dealing involving Nightofficer would not establish a mutual shared assumption as to the conventional basis on which the respective parties’ affairs are now conducted).

257. [482]

     I find that the A&U publishing agreements were validly terminated at the time that Ms Morton, acting as director of Nightofficer, signed the memorandum of agreement dated 9 January 2017 with A&U. My conclusion in that regard is fortified by the conduct of those parties thereafter. The fact that Nightofficer did not then hold copyright in the works is not material (and, indeed, the agreement acknowledged as much). As to the Bolinda and CenterPoint contracts, it is apparent on the evidence that the contract between Ms Morton and Bolinda in respect of Book 1 expired on 21 March 2016 in accordance with its terms; and that the CenterPoint agreements in respect of Books 1-3 expired in about 2013, 2014 and 2014, respectively, in accordance with their terms. Ms Morton’s evidence at [55] of her second affidavit as to the termination of the remainder of the Bolinda contracts was not challenged, and I would accept it.

258. [483]

     There was no evidence of the termination of the remainder of the CenterPoint contracts (those in respect of Books 4 (Exhibit 8, CB 6/2464) and 5 (Exhibit 8, CB 6/2505) (respectively entered into on 29 March 2012 and 27 August 2014 each with a period of five years from the buyer’s publication date). The amended defence pleads at [38] that Ms Morton terminated the Book 4 contract on 31 March 2016 and that CenterPoint “confirmed” on about 23 November 2017 that the Book 5 publication was out of print. However the particulars (which refer to Ms Morton’s second affidavit (27 September 2017)) do not contain any reference to those communications. There is, however, a general statement in that affidavit at [121] where Ms Morton refers to “the steps I took ... [to] renegotiate my agreements with A&U, Bolinda and other publishers”.

259. [484]

     Had I found that Ms Anthony had an entitlement to ongoing commission, notwithstanding the termination of the agency relationship in respect of contracts which were still on foot, I would have considered whether any declaration to that effect should be conditioned on evidence as to whether the CenterPoint contracts dated 29 March 2012 and 27 August 2014 are still in force (although, noting that Ms Morton’s amended defence states that there are no royalties being received by her under those contracts, there would be a doubt as to the utility of any such declaration in any event).

260. [485]

     Ms Anthony’s claim based on conventional estoppel invokes the principles articulated in Thompson v Palmer (1933) 49 CLR 507 at 547; [1933] HCA 61 (per Dixon J) and reiterated in Grundt v The Great Boulder Proprietary Coal Mines Ltd (1937) 59 CLR 641 at 674-677; [1937] HCA 58 (Dixon J), namely that the law should not permit an unjust departure by a party from an assumption of fact which that party has caused another party to adopt or accept for the purpose of their legal relations.

261. [486]

     Ms Anthony submits that the evidence establishes on the balance of probabilities that, from about March 2002, she conducted herself on the basis that she was Ms Morton’s literary agent and that her role included negotiating publishing agreements on behalf of Ms Morton (referred to in the pleading as the Agency Assumption). It is submitted that the evidence also establishes on the balance of probabilities that, from about March 2002, Ms Anthony conducted herself on the basis that for each work for which she negotiated a publishing agreement she was entitled to a commission of 15% on Ms Morton’s earnings on that work for the life of the work, irrespective of whether the agency agreement was terminated and a new agent appointed, and irrespective of whether new publishing agreements were negotiated for those works (in the pleading this is referred to as the Royalties Assumption – see [175] above).

262. [487]

     It is submitted that the evidence establishes that Ms Morton conducted herself in her relationship with Ms Anthony during the same period in accordance with both the Agency Assumption and the Royalties Assumption between about March 2002 and December 2015. Ms Anthony argues that the fact that this was the assumed state of affairs between Ms Anthony and Ms Morton is very clear from the course of dealing between them including: the actions of Ms Anthony in negotiating publishing agreements for Ms Morton and in receiving her income therefrom and deducting her 15 % commission for many years before remitting the balance to Ms Morton; as well as from the termination letter written by Ms Morton to Ms Anthony on 10 December 2015 and the email (said to have been written on Ms Morton’s behalf) from Ms Kremer on 16 December 2015.

263. [488]

     It is submitted that Ms Morton’s departure from the Royalties Assumption has occasioned financial loss and detriment to Ms Anthony; and that Ms Morton is thus estopped from resiling from the Royalties Assumption by operation of the doctrine of estoppel by convention.

264. [489]

     As to the conventional estoppel claim, it is submitted for Ms Morton that this claim fails for the same reason that Ms Anthony’s contract by conduct claim fails, namely that there is no evidence that Ms Morton conducted herself on the basis that Ms Anthony would remain the agent on the record for the life of the work. Ms Morton submits, further, that the convention was not clear and unequivocal, and that Ms Anthony has not proved that any reliance by her was detrimental in the relevant sense.

265. [490]

     Estoppel by convention is a form of estoppel in pais (see Grundt v The Great Boulder Proprietary Mines Ltd at 674; Legione v Hateley (1983) 152 CLR 406 at 430; [1983] HCA 11 (Mason and Deane JJ)). It operates “when both parties have adopted the same assumption as the basis of their relationship, often without appreciating that any departure from the strict legal position is involved, so as to hold both parties to their common understanding” (Moratic Pty Ltd v Gordon [2007] NSWSC 5 at [33], Brereton J). In Thompson v Palmer (at 547) Dixon J said:

266. [491]

     Brereton J in Moratic Pty Ltd v Gordon said that “if parties to a contract by their course of dealing put a particular interpretation on its terms, on the faith of which each to the knowledge of the other acted and conducted their mutual affairs, they are bound by that interpretation just as much as if they had recorded it as a variation of the contract” (Moratic Pty Ltd v Gordon at [30]. A similar statement was made in Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd [1982] QB 84 at 121 (Lord Denning MR), to which I refer below).

267. [492]

     In Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65, Tobias JA (with whom Mason P and Campbell JA agreed) said at [194]:

268. [493]

     It can be accepted that an estoppel by convention is capable of supplying an element which would otherwise be absent necessary to make up a cause of action. Examples given in P Feltham et al, Spencer Bower: Reliance-Based Estoppel (5th ed, 2017, Bloomsbury) at [8.57] include where the estoppel supplies an absent fact necessary to establish a contract: “for instance, that a third party has been given B’s authority to enter into a contract on his behalf”. However, the plaintiff here, in addition to seeking an order or declaration that the defendant is estopped from resiling from the Royalties Assumption, seeks “[e]quitable damages for resiling from” that assumption. I return below to the difficulties associated with that claim.

269. [494]

     In a summary of the elements of conventional estoppel (and contrasting conventional estoppel to promissory estoppel) Brereton J said in Moratic Pty Ltd v Gordon (at [31]) that:

270. [495]

     The existence of a shared assumption is essential to an estoppel by convention (see Williams v Marine Ministerial Holding Corporation [1999] NSWCA 302 at [35] (Sheller JA, with whom Mason P and Stein JA agreed); Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 at 308).

271. [496]

     In Ell v Ell [2015] NSWCA 38, Basten JA (with whom Gleeson JA and I agreed) observed that “[b]ecause it is necessary that both parties have adopted the common assumption as the conventional basis of their transaction, at the very least the common assumption should be capable of articulation” (at [35]). There, the common assumption was said to be an acknowledgment by the appellant that he was “indebted to the estate in the sum of at least $800,000” (so as to preclude him from advancing a particular construction of cl 5 of the deceased’s will, which purported to release the appellant from liability for moneys owed to the testator). In order to preclude the appellant in that way, Basten JA said it was necessary that “the appellant and the respondents, being aware of cl 5 of the will, all accepted that it did not release the debt” (at [35]; my emphasis). There was no evidence that the appellant entertained such an assumption (see at [36]); nor did the evidence establish that the parties had proceeded on the basis that the debt had been compromised (see at [42]). It can be seen from this decision that is essential that the alleged assumption has in fact been adopted by the parties.

272. [497]

     A question which arises in the cases (and academic) commentary is whether it is necessary that there was a representation or an inducement on the part of one party which caused the adoption by the other of the assumption. In The August Leonhardt [1985] 2 Lloyds Rep 28 at 34-35, Kerr LJ said:

273. [498]

     However, there are undoubtedly cases of estoppel by convention which are difficult to reconcile with that statement (see for example Moratic Pty Ltd v Gordon). Latham CJ’s decision in Grundt v The Great Boulder Proprietary Coal Mines Ltd also indicates an understanding of estoppel by convention which does not require a representation.

274. [499]

     Another question which arises is whether it is necessary for the assumption to have been communicated between the parties. In John Cartwright, Formation and Variation of Contracts (Sweet & Maxwell, 2014), the matter is put in the following way (at [10-05]):

275. [500]

     In Ell v Ell Basten JA said at [34]:

276. [501]

     As to whether the assumption must have been induced by one party in the other, in Moratic Pty Ltd v Gordon, Brereton J held there was an estoppel by convention binding a lessor and lessee (and hence there was no liability on the part of the lessee to pay the disputed amount) in circumstances where there was no evidence as to a representation by the lessors as to the subject matter of the assumption (the rent payable under the lease) and where his Honour found that the lessors had neither induced, nor acquiesced in, the making of the assumption by the lessee. His Honour had rejected the promissory estoppel case on precisely that basis (at [43]). His Honour explained his finding as to a conventional estoppel as follows (at [46]):

277. [502]

     In Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd, the effect of the estoppel by convention was that the Court declined to make a declaration that the plaintiff, a guarantor, was not liable to pay the defendant bank any money under the guarantee: even though the declaration sought by the plaintiff reflected the express terms of the guarantee. This was in circumstances where the primary judge found that “by their whole course of conduct” (see at 100) the plaintiffs had represented to the bank that their guarantee was binding and effective; and characterised that conduct as “[having] lull[ed] the representee into a state of false security” (at 108). The Court of Appeal upheld the primary judgment.

278. [503]

     The decision in Grundt v The Great Boulder Proprietary Mines Ltd is often cited for the proposition that whether a party will be estopped by a conventional estoppel depends upon the part taken by that party in occasioning the adoption by the other of the relevant assumption. In that case, the appellants had commenced proceedings before a mining warden seeking a declaration that they were working within the area granted to them by the tribute agreement. The case, however, came to the High Court on the cross-claim for an accounting for all ore taken from the site and for damages for conversion and trespass (the original plaint having by that stage been disposed of by the finding that the respondent was not entitled to cancel the agreement). The appellant argued that the respondent was barred by an estoppel by convention from bringing a conversion or trespass claim which involved challenging the appellant’s assumption or understanding as to the extent of the lode.

279. [504]

     Latham CJ (at 654), who dissented, concluded that the Warden’s conclusion that the area mined was outside the tribute had not been shown to be clearly wrong. In his Honour’s view, however, the conversion claim failed for other reasons (at 656); whilst the trespass claim was successfully met by the estoppel defence. In Latham CJ’s view, the determinative facts on the estoppel point were that the respondent had dealt with the tributers on the basis that the ore was ore to which the terms of the agreement applied (in particular (at 657) the tributers had offered to cease mining but continued instead after the offer had been declined); that the respondent had received the benefit of the work done and of the expenditure of money by the tributers; and that the respondent had “in every respect acted upon the basis that the ore then being mined, including ore known to be derived from the western swing, was ore which was to be dealt with in accordance with the terms of the agreement” (656-657). His Honour quoted the following passage from Verschures Creameries v Hull and Netherlands Steamship Co [1921] 2 KB 608 at 612:

280. [505]

     However, Latham CJ decided the case on the basis of waiver (at least for part of the period) or estoppel by waiver. Latham CJ indicated that the estoppel was operating “as a rule of evidence” (at 659) but emphasised that it was limited to any claim which might otherwise have been made in respect of the operations of the tributers during the period of the relevant conduct of the respondent only.

281. [506]

     In the majority, Dixon J also rejected the appellant’s challenge to the finding made by both the Warden and the Supreme Court that the tributers had mined outside the permissible area (at 670). However, as to the estoppel point, Dixon J considered significant the evidence that, when the error or breach was first pointed out in May 1935 by the respondent, a conversation ensued in which the respondent’s general manager “included some expression of a desire that the tributers should not bring all their men to the surface” but said that the tributers “would hear from him later”. There was then no further discussion (excepting one occasion when the underground manager raised the point but said it was a matter for the general manager) until August 1936, at which time the company relied on the breach to serve a notice of cancellation. Dixon J said that by these dealings, the question of the extent of the lode “was left as a matter of dispute, where each party stood upon whatever rights belonged to it”.

282. [507]

     Dixon J held that there was no foundation for an estoppel precluding the respondent from denying that the western lode fell within the agreement: at 672. This was because the general manager “did not give the tributers to understand that the company was content to act on the assumption that the agreement did extend to the western lode”. Dixon J held (at 677) that there was no estoppel because of “the absence of any assumption that the lode or the ore fell within the tribute and the absence of any representation, agreement or conventional understanding on the part of the company”. His Honour said (at 677):

283. [508]

     That said, it is apparent from earlier in Dixon J’s reasons that his Honour considered that the making of a representation as to a particular state of affairs was but one of the ways in which a party might later be estopped from departing from the state of affairs, as his Honour had quoted from what he had earlier said in Thompson v Palmer at 547, namely that:

284. [509]

     The decisions in Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd and Grundt v The Great Boulder Proprietary Coal Mines Ltd indicate that whether the parties have adopted a mutual assumption is a matter which can be inferred from all the surrounding circumstances and from the course of dealings between the parties. Dixon J considered Grundt v The Great Boulder Proprietary Coal Mines Ltd to be a case where the distinct objection by the cross-claimant to the proposition put at the time (which would be inconsistent with the right now claimed) meant that there was no representation; and there was no mutual assumption derived from any other source. A direct denial or taking up of the opposite position is, clearly, one way that an assumption might never become a shared assumption. (McTiernan J agreed with Dixon J.)

285. [510]

     Accepting, for present purposes, that evidence of conduct or a course of dealings might inform a conclusion in relation to a conventional estoppel, I am not satisfied in the present case that a shared assumption was adopted by the parties. My conclusion as to the agency agreement and the alleged March 2002 conversation informs this issue (and, indeed, Senior Counsel for Ms Anthony accepted that the alleged oral agreement was what gave rise to the claim based on conventional estoppel). In other words, I am not satisfied on the balance of probabilities that there was a common assumption between Ms Morton and Ms Anthony along the lines of the Royalties Assumption that the commission would be ongoing. The conventional estoppel case must thus fail.

286. [511]

     In those circumstances it is not necessary to deal with the question as to the reliance by Ms Anthony on the alleged Royalties Assumption, and the detriment she says she will suffer if there is permitted to be a departure from that assumption. Suffice it to note that the fact that Ms Anthony continued to provide agency services does not seem to me to be sufficient to establish reliance on any such common assumption (nor that this was relevantly to her detriment). It is consistent with her reliance on an agreement for the payment of present commission. There is no evidence that Ms Anthony would have acted differently (in the sense of changing her longstanding practice of oral agreements or otherwise) had she been aware that her entitlement to an ongoing commission might later be disputed. It may be that she would have then sought to negotiate an oral arrangement on those terms but that is no more than speculation. Given that the agreement that I have found came into existence before publication of Book 1, it cannot be assumed that Ms Anthony would have foreseen at that stage the success of Ms Morton’s novels and it may be that she would simply have continued on the basis of the agreement for payment of commission for the term of the agency agreement had this been challenged at that stage. The arrangement, as it transpired, was a profitable one, on Ms Anthony’s own admission. I do not consider this to be a case of the kind addressed by the High Court in Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 (there, a proprietary estoppel case) where one could infer reliance based on the experience of human nature.

287. [512]

     At this point I also note that the statement of claim (at [7]) includes a claim for relief for “[e]quitable damages for resiling from the Royalties Assumption”. The phrase “equitable damages” is not a helpful one. The authors of Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (JD Heydon, MJ Leeming and PJ Turner) (5th ed, 2015, LexisNexis) note at [23-010] that:

288. [513]

     In Harris v Digital Pulse Pty Limited (2003) 56 NSWLR 298; [2003] NSWCA 10 at [2], Spigelman CJ observed:

289. [514]

     However, Basten JA has said (The Salvation Army (South Australia Property Trust) v Rundle [2008] NSWCA 347 at [129]), after referring to the phrase “compensation for loss inflicted for breach of fiduciary duty”:

290. [515]

     Perhaps a greater difficulty is in ascertaining how it is that Ms Anthony claims to be entitled to “[e]quitable damages for resiling from the Royalties Assumption”. In my view the conceptual difficulties with that claim warrant a comment. Given that the statement of claim does not refer to s 68 of the Supreme Court Act 1970 (NSW), it appears the claim is one for equitable compensation in the exercise of equity’s own jurisdiction for breach of an equitable obligation, as described by McLelland J in United States Surgical Corp v Hospital Products International Pty Ltd [1982] 2 NSWLR 766 at 816:

291. [516]

     In the 2017 edition of Spencer Bower: Reliance-Based Estoppel at [8.54] it is said:

292. [517]

     In a different context, Lord Denning MR observed that “when a man is estopped, he has not agreed to anything. Quite the reverse. He is stopped from telling the truth” (see Woodhouse A.C. Israel Cocoa Ltd S.A. v Nigerian Produce Marketing Co Ltd (1971) 2 QB 23 at 60, quoted in Legione v Hateley at 436-437).

293. [518]

     Another way of making the point is to say that the appropriate intervention, in order to avoid the detriment, is for the court to recognise and sustain the assumption as between the parties. Examples of cases where there would have been no detriment if the assumption were falsified – and where, therefore, no relief was granted – include Thompson v Palmer and P.W. & Co v Milton Gate Investments Ltd [2004] Ch 142.

294. [519]

     Given that the premise of relief in a case where conventional estoppel is successful is that the party asserting the estoppel will suffer detriment if the assumption is falsified, there can be no basis for adding to the available remedies an award of damages as though the assumption has already been falsified. As a matter of general principle, damages are compensatory and, in most cases, their purpose is to place the plaintiff into a position as good as that in which he or she would have been had the contract been performed (G H Treitel, Remedies for Breach of Contract (1988, Oxford University Press), 76).

295. [520]

     Therefore, had I concluded that Ms Anthony had established the elements of an estoppel by convention (including the element of detrimental reliance), I would have held that the appropriate relief was to adjust the parties’ relations as though the assumption were true. That might, in an appropriate case, include declaring that Ms Morton was obliged to do certain things; or declaring that Ms Anthony was entitled to terminate the contract, in which case, damages might be assessed on the basis that the Royalties Assumption formed part of the contractual agreement between the parties. However, there can be no basis for a claim for equitable damages for resiling from the assumption.

296. [521]

     That issue, however, does not arise in circumstances where I conclude that Ms Anthony has not established a shared assumption by the parties that the royalties under the agency agreement would be payable for the life of the works. The evidence does not satisfy me on the balance of convenience that Ms Morton shared or adopted any such assumption. As noted above, the mutuality of the assumption is essential to the estoppel. I am not persuaded that there is any evidence of conduct which is explicable only by the fact that the parties had made such an assumption (as was the case in Moratic Pty Ltd v Gordon and Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd).

297. [522]

     The damage alleged to have been suffered by Ms Anthony as a result of the alleged breach of the agency agreement and the alleged unconscionable departure from the Royalties Assumption is quantified as 15% of all the royalties paid on all sales of Books 1 to 6 (including advances of royalties) between 21 January 2016 and the present. The future loss and damage is said to equate to 15% of all future royalties paid on all sales of Books 1 to 6. Although the latter component of such loss, when reduced to damages, is based on an estimate as to future royalty payments paid in respect of Books 1 to 6, it is submitted that in this case it is just and equitable to award equitable damages representing an estimate of the loss and detriment Ms Anthony will suffer through Ms Morton’s continued non-performance of the contractual term.

298. [523]

     As to the assessment of this loss and damage, Ms Anthony relies upon the agreed facts, and calculations of past and future royalties by a forensic accountant, Mr Tony Samuel.

299. [524]

     Mr Samuel, a Managing Director of Sapere Research Group Ltd and a former partner of PricewaterhouseCoopers, with over 20 years’ experience with the latter firm and over 30 years’ experience in the investigation of accounting records for the purposes of audit, due diligence, valuation and disputes, has prepared a report dated 28 September 2017 providing his expert opinion as to three matters: the amount of author advances and royalties likely to flow and therefore the amount of agent’s commission calculated from 15% from 25 January 2016 for the balance of the life of Books 1 to 5 and for Book 6 (which was then yet to be published); how, if Book 6 were never to be published, that would affect the answer to the first question (which clearly does not arise as Book 6 was published in September 2018); and, assuming film or television rights were sold to any one of Books 1 to 5 how that would affect the answer to the first question.

300. [525]

     In summary, Mr Samuel’s answer to the first question (which he considered would unavoidably result in an understatement or overstatement of the actual commission that would become a factual matter in due course – see [24]) amounted to $2.226m (together with interest, if allowed to 31 December 2017 of $0.18m). Having regard to his answer to question 2 (which does not now arise) it would appear that around half of that estimate is premised on the publication of Book 6. Mr Samuel was not able to estimate the effect that a film or television programme might have on the sales of the books but considered that it was axiomatic that the sales would increase in that event (see [27]-[28]). For illustrative purposes (noting it was not possible for him to assess the effect of the sale of film or television rights) he estimated the commissions Ms Anthony would earn based on estimated 2018 advances of royalties of $2.75m and $3.25m respectively, decreasing by 10% per annum thereafter (see [29]).

301. [526]

     Thus at [30], Mr Samuel estimated Ms Anthony’s loss, based on estimated 2018 advances and royalties of: (a) $2.75 million (if calculated at $2.053 million) and (b) $3.25 million (if calculated at $2.896 million), and in each case interest of 0.018 million.

302. [527]

     For Ms Morton, expert evidence was adduced from Mr Wynand Mullins, a chartered accountant and partner of Ferrier Hodgson, who is the leader of its forensic accounting practice in Sydney and specialises in the provision of forensic accounting services. He has prepared a report dated 18 December 2017 (CB 5/1952) in which he opines as to the loss suffered by Ms Anthony (if any) under two alternative termination dates (the date of termination of the agency arrangement – said to be 10 December 2015; and the date of termination of the publishing agreements – the last of which being on 8 March 2017) and reviews and prepares a critique of Mr Samuel’s report. He also calculates the difference between the actual commissions deducted from gross international receipts and the commission that would have been paid assuming the instructed commission rates (on the basis that world rights deals were not entered into for Books 3 to 6).

303. [528]

     As to Ms Anthony’s claimed loss, on the first scenario, Mr Mullins concludes that Ms Anthony has received all moneys due up to 10 December 2015; and, on the second scenario, he concludes that Ms Anthony may be entitled to $211,770 in commission that has not been paid to her from 26 January 2016 to the date of termination of the publishing agreements.

304. [529]

     As to Ms Morton’s claimed loss, based on the information in the A&U Schedule and his instructions as to hypothetical commission rates, he assesses the loss relating to the commission claim to be $3,907,513 (though by the time of the hearing the estimated loss was put at a lower figure).

305. [530]

     As to commission on advance/royalties from the end of the A&U schedule to 31 December 2017, Mr Mullins says (at [142]), in summary: that Mr Samuel’s analysis does not distinguish between advances and royalties and does not consider advances not earnt out; that Mr Samuel does not attempt to forecast future sales of works nor does he attempt to estimate future advances and royalties; and that he disagrees with the assumption adopted by Mr Samuel that the advances and royalties would be the same as the 2016 advances and royalties (in Mr Mullins’ view the 2017 advance/royalty figure should be lower than the figure in 2016 given the decreasing sale trend in the German sales).

306. [531]

     As to the commission after 1 January 2018, at [142] Mr Mullins, in summary, that he disagrees with the approach of forecasting future commissions payable to Ms Anthony and discounting them to today’s value at a discount rate which reflects the risk of achieving those commissions; and, specifically, Mr Mullins disagrees with the assumptions adopted by Mr Samuels as to: the royalties and commission payable in 2018; the decay assumptions (i.e., how much year on year will the discount drop); and the discount rate to be applied (to take into account the time value of money).

307. [532]

     As to the assessment of Ms Anthony’s claimed loss, the experts ultimately disagreed, in essence, on four matters: the royalties and commission payable in 2018; the “decay assumption” (i.e., now much year on year book sales would decrease); the discount rate to be applied (to reflect the time value of money together with the risks of the future cash flow); and how a perceived trend in the German sales data (“spikes” in the sales of books) should be treated (that last issue being an aspect of the first and second of the four matters on which the experts were divided).

308. [533]

     In addition, there is the difficulty for Ms Anthony that, insofar as the ongoing commission claim is referrable to royalties earned by Ms Morton for the life of each work (i.e., beyond the termination of the agency relationship and beyond the termination of the respective publishing agreements), Ms Morton now does not earn royalties in relation to Books 1 to 6. Rather, those royalties are payable to Nightofficer. There was (and could have been) no claim for wrongful termination of the agency relationship as such (since on Ms Anthony’s account Ms Morton was free to leave the agency at any time). Assuming, for present purposes, that there was an ongoing entitlement to commission beyond the term of the agency agreement, that nevertheless does not address the practical difficulty that there are now no royalties earned by Ms Morton. There was no pleaded claim (although there was a submission made to this effect and it was put to Ms Morton in cross-examination, which she denied – T 298.29) that the assignment of copyright to Nightofficer was an attempt to avoid what Ms Morton understood to be her continuing obligations to pay Ms Anthony commission in respect of the earnings of Books 1 to 6 (see T 298.26), or otherwise that the Nightofficer transactions were an attempt to frustrate Ms Anthony’s claims in the present proceedings. Thus, there is force to Ms Morton’s submission that even if there was a liability to pay ongoing commission there would be nothing payable beyond January 2017 (when the new publishing agreement was entered into with Nightofficer).

309. [534]

     Turning back to the basis on which future damages were claimed by Ms Anthony, this was, in effect, on the basis of the net present value of the future royalty stream for Books 1 to 6 on the assumption that Ms Anthony’s claim to 15% commission for the balance of the life of the published works is correct. At the time the experts prepared their respective reports, Ms Morton had not released a book since October 2015. There was a dispute between the experts as to the assumption that 2017 royalties would be the same as 2016 royalties (in circumstances where there was then only limited data as to the 2017 royalties) but ultimately agreed that there would not be likely to be much of a difference (see T 354.33 per Mr Mullins). That left the four issues identified above.

310. [535]

     As to the first of those matters, Mr Samuel’s approach was to start (on the basis of the limited information up to January 2017) the historical component for 2017 and then to estimate what royalties would be in 2018 assuming that Book 6 would be released in 2018 and based on the historic publishing contracts with A&U. He said that he had tried to separate advances and royalties but that the information did not allow that with accuracy (see T 362.13) and so he dealt with them as a “single quantum”. Ms Samuel considered that “spikes” in the royalties were likely to be referrable to additional sales when either a book had been released in a new territory or there was a release of a new book in a territory increasing the sales of earlier books (see T 362.49ff). He made clear that in his view this was a reasonable estimation but that an estimation of future royalties book by book would be impossible due to the number of territories and books (which would make the volume of assumptions necessary to attempt that exercise impracticable (see T 365.25). Mr Mullins considered that this was an oversimplified approach and that there was not a discernible pattern as to royalties (see T 367. 11ff; T 368.4ff).

311. [536]

     Mr Mullins considered that the German sales data, which he considered to be a reasonable sample size, demonstrated that there were not spikes and that the volume of books being sold was generally declining (see T 369.36ff; T 370.32). He did not consider that a rolling average (two year book release) approach was a reasonable approach (T 367.7). In that regard, Mr Samuel considered that there was a significant discrepancy between the German sales data and “what was happening in total in the royalties” (see T 372.11). His theory was that the launch of any new book would have an impact on the existing books (see T 379.45).

312. [537]

     It seems to me that the differences between the experts on the first and fourth of the four issues illustrates the difficulty of making assumptions based on incomplete historical data as to the likely future royalty stream across a large number of territories into the future. To my mind that would have been a significant factor weighing against an award of damages based on the net present value of the future royalty stream (assuming Ms Anthony had been successful in her ongoing commission claim beyond termination of the publishing agreements and assuming that the difficulty following from the Nightofficer transactions had not intervened) and for that reason I would have been inclined to frame any relief by way of an order that Ms Morton indemnify Ms Anthony going forward for 15% commission on the actual royalty stream for Books 1 to 6 calculated by reference to the assumption that the A&U publishing agreements had continued (thus removing any windfall by reference to greater royalties being earned under the new publishing arrangements). As it is, that does not arise for various reasons: first and foremost because Ms Anthony has not established the ongoing entitlement to commission but also because even if she had such an entitlement was predicated on receipt of royalties by Ms Morton and that no longer occurs.

313. [538]

     As to the dispute between the experts in relation to the discount rate that would be appropriate to apply when calculating net present value, there appeared at one stage in the concurrent hearing to be agreement between them that it was conceptually correct that the same answer should be achieved if a pre-tax discount rate was applied to pre-tax cash flows as if a post-tax discount rate was applied to post-tax cash flows and then grossed up again to allow for the tax payment (see Mr Samuel’s explanation at T 383). (The issue was raised because Mr Samuels considered that Mr Mullins’ statement (at [171(b)]) that when assessing pre-tax cash flows a nominal pre-tax cash discount rate was applied in performing a discounted cash flow analysis was incorrect when for the purposes of determining a damages award pre-tax (see T 383.4).

314. [539]

     Mr Mullins accepted (T 384.39), as I understand it, that, arithmetically, one would end up with the same number using a pre-tax discounting versus a post-tax discounting as long as one followed “all the right steps”. However, he maintained his disagreement with the discount rate that Mr Samuel considered should be applied (see T 386.37ff), largely, as I understood his evidence, on the basis that he did not accept Mr Samuel had identified any risks (such as the “key man”, or perhaps in the present case that should be “key woman”, risk – of Ms Morton ceasing to write books or something happening to affect her ability to produce books; or any other risks “associated with actually achieving these figures going on in perpetuity”) (see T 387.31).

315. [540]

     After considerable debate during the concurrent evidence on this issue, the difference between the two seemed to me to be that Mr Samuel considered that a 10% post-tax rate should be applied to pre-tax flows (and did not consider it necessary to apply a pre-tax discount rate) and Mr Mullins wanted to apply a pre-tax discount rate to pre-tax cash flows to obtain a pre-tax award figure which might or might not be grossed up (see T 395.31); and Mr Samuel explained with cogency why conceptually one cannot apply a post-tax rate to one set of cash flows and then apply a pre-tax rate to the same set of cash flows and get the same answer (T 396.1).

316. [541]

     Had it been necessary to determine, I would have accepted as inherently logical Mr Samuel’s explanation that conceptually the methodology adopted should not change the award (see T 397.24) whether one applied pre-tax discounting or post-tax discounting and then grossed up the award (see T 397). Both experts agreed that if a post-tax discount rate were to be applied then 10% was an appropriate figure (T 398). On that basis, I would have accepted Mr Samuel’s methodology of applying a post-tax rate to pre-tax cash flows in order to obtain a pre-tax award (see T 396.11).

317. [542]

     In any event, no damages are recoverable as I have concluded that there was no oral agency agreement as alleged (and no claim based on conventional estoppel) and hence no breach sounding in damages of such an alleged agreement nor any entitlement to compensation on the alternative basis.

Determination of issues on Ms Morton’s Cross claim

1. [543]

   As noted earlier, although Ms Morton initially pleaded in her cross-claim that there was a failure on Ms Anthony’s behalf to ensure that she received moneys due to her promptly and failed properly to account therefor, that case was not pressed at the hearing. Rather, the nub of the cross-claim (as set out earlier; and see T 9.45-9.50) is that, in breach of the various duties owed to Ms Morton, Ms Anthony advised Ms Morton to enter into world-wide rights deals with A&U, instead of direct deals with foreign publishers on a territory by territory basis, and failed to advise Ms Morton of the availability of territory by territory deals, or of the significant savings in commissions to Ms Morton that would have resulted from direct agreements with her foreign publishers (as a result of which it is contended that Ms Morton was not able to make an informed decision about the commercial benefit of entering into the world rights agreements with A&U).

2. [544]

   The contractual duties pleaded at [21] of the amended statement of cross-claim, which it is said were implied as a matter of law in the agency contract that Ms Morton alleges was formed from as early as February 2005 (see [20] – that being a contract implied by contract and at law), include the following:

3. [545]

   The alleged fiduciary duties owed by Ms Anthony to Ms Morton are pleaded at [25] as including:

4. [546]

   The duty of care that is alleged is pleaded at [26] as a duty of care to perform her obligations as an agent with due skill, care and diligence and the expertise of a literary agent representing authors both in Australia and internationally. The salient features of the relationship by reason of which the duty of care is alleged to be owed include that:

5. [547]

   As previously noted, Ms Anthony largely admitted the relevant duties alleged to have been owed by her (those pleaded at [21](c), (d) and (e) and [26]) and expressly admitted that Ms Anthony owed fiduciary duties and a duty of care to perform her obligations as an agent with due skill, care and diligence (see [21], [25], [26] of her defence to the cross-claim).

Ms Morton’s submissions on the cross-claim

1. [548]

   Although the pleading is not limited to the world rights deals the subject of the publishing agreements from Book 3 onwards, in the submissions for Ms Morton it was made clear that no claim in relation to Books 1 and 2 was pressed. That is hardly surprising having regard to the evidence of Ms Morton’s expert, Ms Darling, that (notwithstanding her view that an agent would not do a world rights deal unless it was the only offer that could be obtained), a reasonably competent agent would have accepted a world rights publishing deal in respect of Ms Morton’s first novel, “The Shifting Fog”, because Ms Morton had not been published previously; and possibly also in respect of Ms Morton’s second book, “The Forgotten Garden”, because there was at that time no sales history for “The Shifting Fog”.

2. [549]

   However, it is submitted that, from Book 3 onwards, world rights deals with a local publisher were not in Ms Morton’s interests and that a reasonably competent agent would not have recommended world rights deals with A&U to Ms Morton for Books 3 to 6. In this regard, Ms Morton relies on the evidence of Ms Rejt and Ms Darling, to which I have referred above.

3. [550]

   As to the publishing agreements for Books 3 and 4, Ms Morton’s complaint, in essence (apart from the breach of fiduciary duty allegations and the complaint that Ms Anthony did not approach other publishers), is that Ms Anthony did not explain to her: how world rights deals work; that Ms Anthony could license the international rights to Ms Morton’s books directly, on a territory by territory basis, once Ms Morton had achieved international commercial success; that it was not necessary to use A&U as an intermediary to sell her books and to include them in the royalty stream; that Ms Anthony could sell Ms Morton’s books directly to Ms Morton’s established English language publishers, Pan Macmillan (UK) and Simon & Schuster (the US and Canada); that, in the translation territories, Ms Anthony could work directly together with a foreign sub-agent to sell Ms Morton’s books; and that A&U were using sub-agents at a further cost to Ms Morton of 10%. Rather, Ms Anthony recommended agreements for Books 3 and 4 on the same terms as the agreements for Ms Morton’s first two books, save for a larger advance.

4. [551]

   In this regard, Ms Morton notes that in the conversation recounted in Ms Anthony’s third affidavit (at [41]) Ms Anthony points to only one downside of a world rights deal (that commission would be paid to sub-agents) but does not address the fact that commission of 20% for the English language sales and 25% for works in translation would be paid to A&U itself (nor that this could readily be avoided by not conferring on A&U the worldwide rights).

5. [552]

   It is noted that Ms Anthony accepted in cross-examination that: direct deals with Pan Macmillan and Simon & Schuster would have saved Ms Morton 20% of her revenue (see T 158.31-158.32; T 162.39-162.41); direct deals would have reduced the total commission payable in the UK and US to 15% (T 165.22-165.37; 190.19-190.27); in respect of translation territories, the total commissions would have been 25% (10% for sub-agents’ commission and 15% for her commission) (T 190.30-190.44); by June 2007, “The Shifting Fog” was an outstanding commercial success (T 166.44-166.47; T 168.45-168.46; T 170.24-170.25); by June or July 2007 Ms Anthony could have negotiated a contract for Books 3 and 4 directly with Pan Macmillan and Simon & Schuster (T 158.26-158.29; T 167.10-167.12; T 173.1-173.20) as well as directly with subagents in translation territories (T 173.22-173.24); Ms Anthony could have chosen another publisher and every publisher probably wanted Ms Morton (T 173.3-173.4); in June 2007, Ms Morton had the option of licensing her book rights to A&U for Australia and New Zealand only (T 159.27-159.30; T 162.21-162.24); and Ms Anthony knew that A&U wanted to keep the world rights for Ms Morton’s third and fourth novels (T 162.15-162.18) but never pressed A&U on how hard it was prepared to bargain for the world rights (T 163.7-163.9), never pushed back on A&U’s request for world rights (T 163.30-163.41) and never tried to negotiate an agreement limited to Australian and New Zealand rights (T 163.46-163.48; T 164.20-164.24).

6. [553]

   It is noted that Ms Anthony saw her role as involving the giving of advice to Ms Morton (T 177.50-178.2); that she admits that she advised Ms Morton to enter into the world rights publishing agreements with A&U for Books 3 and 4 (T 162.26-162.28); and that she admits that she did not tell Ms Morton that those deals would cost her 20-25% more in commissions than direct territory by territory deals (T 162.30-162.32).

7. [554]

   Ms Anthony accepted in cross-examination (T 190.50-T 191.3) (although later retracted – T 191.18-191.20) that Ms Morton would only have had to pay 15% in English language territories, and 25% in translation territories, if she had negotiated with due care as a reasonably competent literary agent.

8. [555]

   Ms Morton’s evidence is that Ms Anthony: did not explain to Ms Morton how world rights deals work; did not explain that the international rights to publish Ms Morton’s books could be licensed directly, on a territory by territory basis, especially once she had achieved international commercial success and had existing publisher relationships in most territories; and did not explain that it was not necessary to use A&U as an intermediary to sell Ms Morton’s books and to include them in the royalty stream. In particular, Ms Morton complains that Ms Anthony did not explain that she could sell Ms Morton’s books directly to Ms Morton’s established English language publishers, Pan Macmillan (UK) and Simon & Schuster (the US and Canada); did not explain that, in the translation territories, Ms Anthony could work directly together with a foreign sub-agent to sell Ms Morton’s books; and did not explain that A&U was using sub-agents at a further cost to Ms Morton of 10%.

9. [556]

   It is submitted that, taken at its highest, Ms Anthony’s evidence was that “[t]he industry is a very open one and any intelligent person can find out for themselves, without talking to their agent” (T 165.44-165.45). Ms Morton’s evidence is that Ms Anthony and she did not have any conversations about world rights beyond Ms Anthony’s comment in respect of Book 1 that “[A&U] might even be able to get you a nice little overseas deal”.

10. [557]

    Ms Morton submits that it is clear that on the issue whether worldwide rights should have been given to A&U for Books 3 to 6, Ms Darling was talking about the standards of a reasonably competent literary agent and not just about her personal practice (referring to Ms Darling’s affidavit affirmed 3 July 2018 at [4], [7], [14] and her evidence at T 327.4-327.17); and to her evidence in cross-examination that she did not know any agent who would sell world rights when the agent did not have to do so (T 321.34-321.35). As to Ms Rejt, Ms Morton argues that her evidence (admitted as to Ms Rejt’s own experience, not as expert evidence) was given in circumstances where Ms Rejt has extensive experience of over 35 years in publishing (see Ms Rejt’s affidavit affirmed 21 June 2017 at [1]; T 336.39-336.44); and says that the evidence given by Ms Rejt as to worldwide rights deals (which I have summarised earlier) was not challenged in cross-examination.

11. [558]

    It is thus submitted by Ms Morton that Ms Anthony breached her duties in contract and tort to act with due care and skill by: advising Ms Morton to enter into world rights agreements with A&U in June/July 2007 (for Books 3 and 4); and failing to advise her that direct deals in foreign territories could be negotiated or that substantial financial savings would result from excluding A&U as the intermediary. As to Books 5 and 6, it is submitted that the position is even stronger in that there was a longer history of sales in respect of Book 1 and by then there was also a sales history for Book 2.

12. [559]

    Ms Morton notes that A&U approached Ms Anthony with a formal offer for world rights to Books 5 and 6 on 13 April 2010 (Exhibit 8, CB 6/2380). She points to Ms Anthony’s acceptance that she never attempted to limit A&U’s rights to Australia and New Zealand (T 177.17-177.19). It is submitted that all of the negotiations were conducted on the basis that A&U would have world rights (T 176.30.30-32), even though Ms Anthony knew that Ms Morton had an option to retain those rights (T 177.9-177.11), which would have saved Ms Morton 10% commission on all international sales (T 177.13-177.15).

13. [560]

    Further, it is noted that Ms Anthony gave Ms Morton 24 hours to consider the offer (T 179.6-179.17), urging her to “move immediately and not waste any more time” (Exhibit 8, CB 6/2379); and that in cross-examination, Ms Anthony accepted that she was keen to accommodate A&U’s commercial interests (T 179.24-26). It is submitted that Ms Anthony’s primary objective appeared to be assuaging A&U’s anxiety (T 179.44-46), and ensuring that Robert Gorman (CEO of A&U) and Annette Barlow (Ms Morton’s publisher at A&U) enjoyed “peace of mind” and would “sleep well” (Exhibit 8, CB 6/2288).

14. [561]

    Ms Morton notes that Ms Anthony admitted that she did not discuss with Ms Morton whether to withhold world rights from A&U before urging her to accept the offer for Books 5 and 6 (T 179.31-35) and points to her evidence that she felt under pressure at the time she agreed to the offer (T 272.5; [191]; [192] of her affidavit).

15. [562]

    It is noted that Ms Anthony acknowledged that, by the time the deals for Books 5 and 6 were signed, Ms Morton was “exceptional” (T 182.50); that she accepted that she could have negotiated direct deals with overseas publishers (T 182.48-50; T 183.18-20); and admitted that her actions cost Ms Morton 10% of her revenue (T 183.26-183.33).

16. [563]

    It is submitted that Ms Anthony has no explanation for her failure to restrict A&U’s licence to local rights, or to approach foreign publishers directly, or to advise Ms Morton of the costs of (or alternatives to) world rights deals with A&U either in July 2007 (for Books 3 and 4) or in 2010 (for Books 5 and 6); that her evidence oscillates between her admissions that “I wasn’t thinking of dollars at all” (T 181.24-28; T 164.31; T 171.36; T 172.9-10; T 180.48-49) and her rationale that, by July 2007 “everyone was making money” (by which it is said she meant the publishers) (T 160.35-42). Ms Morton notes Ms Anthony’s evidence in the witness box that A&U was doing an excellent job (T 175.11-12) and that “all [she] was doing” was “keeping the formula working” (T 183.2). It is submitted that Ms Anthony’s judgment as an agent appears to be limited to the view that “if it isn’t broke, don’t fix it, and if it’s just the dollars that are counting out, then I, I have to apologise” (T 193.21-22).

17. [564]

    As to reliance, Ms Morton’s evidence is that she would never have agreed to sell world rights and pay up to 50% total commission had the alternative been explained to her (see her second affidavit sworn 12 September 2017 at [72] admitted as evidence of Ms Morton’s state of mind; T 193.21-22).

18. [565]

    I interpose here to note that Part 1A of the Civil Liability Act 2002 (NSW), within which s 5D is contained, applies to any claim for damages for harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise (see s 5A(1)). “Negligence” within that Part means “failure to exercise reasonable care and skill” (see s 5). Ms Morton’s claims for breach of duty owed in contract and in tort are clearly claims for damages for harm resulting from negligence, and therefore Part 1A must be applied (see Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420; [2009] HCA 48 at [15]; [44]). When I raised this in the course of submissions, the response for Ms Morton was to note that no objection was taken to this evidence on the basis of s 5D(3)(b) of the Civil Liability Act. Further, it is submitted that even if this evidence were inadmissible, having regard to s 5D(3)(b), in relation to the fiduciary duty and contractual breach of duty of care claims, it should be inferred that Ms Morton would not have agreed to enter into world rights deals had she understood the financial consequences, noting Ms Morton’s evidence that her practice had also been to try to maximise her income to support her family (see [121]-[122] of her affidavit evidence CB 1370).

19. [566]

    It is submitted that this evidence should be accepted because, as soon as Ms Morton discovered (in November 2015) that she was paying multiple layers of commission internationally, she terminated her agency agreement with Ms Anthony and commenced negotiations to terminate and replace her agreements with A&U and Bolinda.

20. [567]

    On the basis of the evidence of Ms Morton’s conduct after November 2015, and the contents of her communication to Ms Anthony by email of 11 December 2015 letter (in which she states that: “I have started to read my contracts and look into my financial affairs... The biggest realisation is that it makes no business sense to sell world rights to A&U and it hasn’t done since the first contracts”), it is submitted that it may be inferred that, had Ms Morton been properly advised (at the time of entry into Books 3 and 4 and Books 5 and 6, respectively), she would have acted in accordance with her financial interests and chosen to enter into direct deals with foreign publishers, rather than world rights agreements with A&U.

21. [568]

    In summary, as to the financial consequences of the world rights deals, it is said that for Books 3 and 4, for English language rights the commission payable under the A&U world rights deals was a total of 35% (20% to A&U and 15% to Ms Anthony) compared to a commission of only 15% to Ms Anthony (a loss of 20%); and for translation rights the figures are 50% (25% to A&U, 15% to Ms Anthony and 10% to foreign sub-agent) compared to 25% (15% to Ms Anthony and 10% to the foreign sub-agent) (a loss of 25%); for Books 5 and 6, the comparison for English language rights is 25% under a world rights deal compared to 15% (a loss of 10%) and for translation rights 35% compared to 25% (a loss of 10%) (see submissions at [113]).

22. [569]

    Ms Morton contends that, by advising her to enter into the world rights agreements from Book 3 onwards, Ms Anthony failed to act in Ms Morton’s best interests to the exclusion of her own interests or the interests of A&U.

23. [570]

    The claim for breach of fiduciary duty is that Ms Anthony did not disclose to Ms Morton her conflict of interest in selling Ms Morton’s rights as world rights, as opposed to on a territory by territory basis. That conflict of interest is said to have arisen because A&U was effectively doing the work that Ms Anthony would have had to do herself had she not recommended the entry into the world rights deals (reference is made to Ms Anthony’s second affidavit in which she says (at [65]-[66]) that it was the local publisher, not the agent (i.e., her) representing the author’s work around the world).

24. [571]

    It is submitted that, had Ms Anthony explained the alternatives and sold rights on a territory by territory basis, Ms Anthony would have had personally to carry out the negotiations internationally, instead of relying on A&U, which would have meant significantly more work and expense for Ms Anthony for the same commission (reference is made to Ms Morton’s third affidavit at [74] (CB 1377), in which a comparison was made in relation to a Spanish royalty and it was said that there was a significant difference in terms of the author’s share on that scenario).

25. [572]

    It is submitted that Ms Anthony would also have had a significantly larger administrative burden in following up multiple publishers and sub-agents, as opposed to having one point of contact with A&U who reported to Ms Anthony. It is said that the arrangement afforded Ms Anthony time which Ms Anthony used to act for her other author clients whilst receiving significant income, averaging approximately $300,000 per annum, as payment for the work performed by A&U (and paid for already by Ms Morton).

26. [573]

    It is noted that in cross-examination, Ms Anthony admitted that she was keen to accommodate A&U’s commercial interests (T 179.24-26). It is submitted that Ms Anthony was concerned about the “peace of mind” of Robert Gorman and Annette Barlow, which led her to rush Ms Morton into the deals for Books 5 and 6; that Ms Anthony knew that A&U “wanted Kate to stay with them”, which she facilitated. In her own words, “we were all friends... this wasn’t just somebody else, this was a very close family commitment”; and that Ms Anthony was “content to allow A&U to share in Ms Morton’s potential wealth”, which she justified on the basis that it is “common in the publishing industry, very common”.

27. [574]

    It is submitted that Ms Anthony also acted in her own interests in that: Ms Anthony admitted that she “didn’t wish and didn’t want Kate or myself to move from A&U” (T 173.8-9) and gave evidence that she could not have “done [A&U’s] work myself, not as efficiently and not as professionally in this author’s case” (T 182.45-46) yet she continued to deduct 15% commission. It is noted that this is the same commission that she would have been entitled to deduct if she had done the work herself under the direct deals she acknowledged she could have made with foreign publishers.

28. [575]

    Ms Morton submits that it was not for Ms Anthony to involve A&U in a discussion concerning Ms Morton’s commercial interests before making the deals for Books 3 and 4, pointing to Ms Darling’s evidence that this was a discussion for Ms Anthony and Ms Morton to have alone (T 319.39-43; T 321.44-48). It is submitted that it was not for Ms Anthony to take into consideration her own desire to stay with A&U (because they were friends or otherwise); rather, that Ms Anthony owed a duty to Ms Morton alone. Ms Darling’s evidence (not challenged on this point) was that the interests of a publisher, agent and author are not aligned. It is submitted that Ms Anthony could not attend to the needs and interests of A&U, or herself, without acting in conflict with Ms Morton’s interests.

29. [576]

    Ms Morton contends that the world rights deals cost her 20-25% commission for Books 3 and 4, and 10% commission for Books 5 and 6; and that both Ms Anthony and A&U profited at Ms Morton’s expense. She complains that in failing to advise her that she could enter direct deals, thereby saving her the A&U commission, Ms Anthony failed to disclose information material to the agency (such that Ms Morton could never give her informed consent to the breach).

30. [577]

    Ms Morton argues that the loss she has suffered is calculated on the same basis, regardless of whether the claim is for damages in contract or tort, or for equitable compensation for breach of fiduciary duty.

31. [578]

    It is submitted that the proper calculation of loss is the difference between the amount of commission payable under the world rights deals from 9 July 2007 to 9 January 2017, and the amount that would have been payable if Ms Anthony had negotiated the deals directly. It is said that in practical terms this equates to A&U’s commission: namely, for Books 3 and 4, 20% on the English language rights and 25% on translation territories; and, for Books 5 and 6, 10% on both the English language rights and the translation territories.

32. [579]

    Thus it is contended that Ms Morton’s loss is the commission she paid in respect of Books 3 to 6 to A&U, up until the termination of the publishing agreements recommended to Ms Morton by Ms Anthony, which were terminated on 9 January 2017, which totalled $1,913,136.61 (see Exhibit 3).

Ms Anthony’s submissions on cross-claim

1. [580]

   It is submitted that Ms Morton has not established on the balance of probabilities any of the substantive claims against Ms Morton involving breach of the agency contract, breach of fiduciary duties or breach of duty of care set out in the amended statement of cross-claim. Ms Anthony submits that her evidence as to the signing of the world rights deals should be preferred and that it “comprehensively refutes” the evidence of Ms Morton (which is said to be redolent with hindsight “arising out of the very success that demonstrates the wisdom of Ms Anthony’s strategy in recommending world rights be contracted to A&U, at least for books 1 to 6”).

2. [581]

   Ms Anthony’s evidence in this regard is said to have exposed that her reasoning at the relevant time(s) was as follows: that Ms Morton was a new author with a young family rapidly achieving significant success in a relatively short period of time but needing time to write and meet her contracted authorial commitments in an environment of uncertainty where there were no guarantees that the next book would perform as well in the marketplace as the last. It is said that this evidence was supported by that of Ms Martyn.

3. [582]

   Ms Anthony submits that Ms Morton’s evidence was “rehearsed” and involved repetition of the answer to the effect that she relied on her agent’s advice “topped with implausible evidence that she did not read or understand the agreements she signed”. It is submitted that the expert evidence from Ms Darling lacked depth in in the sense of not taking into account and considering the “more complex” factors that Ms Anthony took into account in relation to Ms Morton’s “unique” situation when negotiating for her.

4. [583]

   As to the claim in relation to Books 3 to 6, it is submitted that Ms Anthony exercised legitimate professional judgment in what she judged to be the best interests of Ms Morton in circumstances “where that judgment nurtured and advanced Ms Morton’s career on an extraordinarily successful trajectory”. Reliance is placed on the following evidence as to Ms Anthony’s reasoning when negotiating publishing agreements for Books 3 and 4 (T 157.15-157.44):

5. [584]

   It is submitted (counter-intuitively perhaps) that the self-deprecatory reference by Ms Anthony to herself in the witness box (“the way I treat my authors is very - not very professional, I guess” – T 157.32) should be understood as having the opposite meaning, namely that she was a highly professional agent who was looking after her client in a comprehensive way with the very best interests of that client and her future development as a successful author with a long-term career uppermost. Pausing there, I did not at the time form the impression that this comment was made in a self-deprecatory way; rather, I thought by this stage that Ms Anthony was becoming tired in the witness box and was responding in a resigned way to what she regarded as criticism of the way in which she dealt with her client authors. But nothing turns on how Ms Anthony described her treatment of her authors in any event.

6. [585]

   It is submitted that Ms Anthony made a professional judgment call when she recommended that Ms Morton enter into the publishing agreements in respect of Books 3 and 4 (T 163.7-163.20):

7. [586]

   It is submitted that Ms Anthony continued to exercise considered professional judgment in relation to the negotiations for Books 5 and 6 with A&U that included a range of factors such as: the very low percentage A&U agreed to of 10%; the continued relationship between Ms Morton and her editor Annette Barlow; and the prior success of the formula involving Ms Morton signing world rights A&U, a publisher who supporting her as a “number one” author – see at T 179.19-179.29:

8. [587]

   It is submitted that (unlike Ms Darling), Ms Anthony considered it relevant and appropriate to take into account a “winning formula” that accounted for these multiple factors, and that she treated past success as a reliable predictor of future success in recommending the appropriate course (see the exchange at T 182.48-183.16):

9. [588]

   Reference is made to Ms Martyn’s statement in her second report to the effect that any estimation of what another publishing regime might have achieved for Ms Morton in terms of overall sales between 2006 and 2010 is purely speculative. It is noted that Ms Martyn also concluded that Ms Morton was well-published and represented by A&U between 2006 and 2010, and that Ms Anthony acted competently over the course of her relationship with Ms Morton, stating that:

10. [589]

    It is submitted that this strategy provided a very solid foundation for Ms Morton’s career that was nurtured to success by Ms Anthony and the “small and devoted team” at A&U; and that, to the extent they differ, Ms Martyn’s evidence should be preferred to that of Ms Darling.

11. [590]

    Ms Anthony submits that another relevant consideration is that it was Ms Morton’s choice to sign each of the A&U publishing agreements (and, indeed the Bolinda and Center Point agreements). Reference is made to Ms Anthony’s evidence that (T 159.44-159.47):

12. [591]

    It is submitted that Ms Morton signed all of her publishing agreements with A&U between 2005 and 3 May 2010 with fully informed consent; that she was provided with copies of the agreements; that she had the opportunity to read them and the financial means and opportunity to obtain external legal and/or accounting advice on them if she wished to (which she did not do).

13. [592]

    Reliance is placed on the observation in Re Pauling’s Settlement Trusts [1962] 1 WLR 86 at 108 by Wilberforce J that:

14. [593]

    Reference is also made to Commonwealth Bank of Australia v Smith (1991) 42 FCR 390 at 393; 102 ALR 453 at 477-478, where Gummow J said that:

15. [594]

    It is submitted that Ms Morton “was always very aware of what she was agreeing to and now, in a position, where the arrangement no longer suits her, is seeking to claim breach of a fiduciary duty or duty of care in order to evade her responsibilities for the payment of commissions to Ms Anthony”; and that Ms Morton’s evidence that she was not aware of the effects of the agreements when she signed them is self-serving and should be rejected.

16. [595]

    Reference is made in this context to Rosenberg v Percival (2001) 205 CLR 434; [2001] HCA 18 at [89] where Gummow J said:

17. [596]

    It is submitted that not only was Ms Morton aware, and understood, what she was signing but that she also she had further opportunity to seek further information on 14 May 2010 when she asked Theresa Park for further information on how World Rights would work. The phone call she alleges was made to Ms Anthony is denied by Ms Anthony but it is submitted that, had it been made, then Ms Morton having been made aware of the World Rights situation had every opportunity to ensure that the matter was resolved to her satisfaction by seeking, through her agent Ms Anthony, to have the agreement for Books 5 and 6 renegotiated. It is submitted that in these circumstances it can only be assumed that Ms Morton was content with the agreements for Books 5 and 6 that were negotiated.

18. [597]

    Thus it is submitted that Ms Morton has not established any breach of fiduciary duty, breach of any duty of care in accordance with established principles of negligence or any breach of contract entitling her to the relief sought under the cross-claim.

19. [598]

    Ms Anthony relies in answer to the whole statement of cross-claim on the limitations defence pleaded at [59] of her defence to the cross-claim (see s 14(1) of the Limitation Act). It is also submitted that Ms Morton has failed to take steps adequately to mitigate her loss through delay and acquiescence.

20. [599]

    Reference is made to Knox v Gye (1872) LR 5 HL 656 at 674-675, where Lord Westbury said:

21. [600]

    In circumstances where Ms Morton seeks only an equitable remedy (noting the distinction between the auxiliary jurisdiction of equity and the exclusive jurisdiction explained by Isaacs J in The Crown v McNeil (1922) 31 CLR 76 at 100; [1922] HCA 33):

Ms Morton’s response on limitations argument

1. [601]

   As to Ms Anthony’s limitation defence, it is submitted that the relevant date for any limitations argument on Ms Morton’s cross claim is the date Ms Anthony commenced proceedings, being 23 March 2016 (see s 74 of the Limitation Act; O’Neill v Foster (2004) 61 NSWLR 499; [2004] NSWSC 906 at [54]); and that Ms Morton’s claims in respect of Books 3, 4, 5 and 6 are not time-barred.

2. [602]

   Further, it is submitted that even if (which is denied) the statutory limitations period began to run from the execution of the original publishing agreements, Ms Anthony fraudulently concealed the availability of a cause of action (referring to Seymour v Seymour (1996) 40 NSWLR 358 at 372) which had the effect, under s 55 of the Limitation Act of suspending time for limitations purposes for some five and a half years (the cross claim being filed on 7 October 2016) and hence each claim with respect to Book 3 and following books is within the statutory time limit.

3. [603]

   The fraudulent concealment allegation is based on the exchange alleged to have taken place between Ms Morton and Ms Anthony in May 2010 (see [95]-[97] above), after Ms Morton became aware that it was unusual for an internationally best-selling author to enter world rights deals.

4. [604]

   Ms Morton’s evidence as to the May 2010 conversation was not challenged in cross-examination. In cross-examination Ms Anthony accepted that the conversation took place in May 2010 as deposed to by Ms Morton (T 185.30; cf. her affidavit at [67]). Ms Morton submits that therefore there is no dispute that the conversation occurred in the terms set out in her affidavit (see [95]-[97] above).

5. [605]

   Ms Morton’s evidence is that she understood Ms Anthony’s reference to “fixing” things in the May 2010 conversation to mean that, from that point in time, she was paying a total of 25% commission on all foreign sales. She believed that the existing contracts for Books 1 to 4 had been renegotiated to reflect the reduced commission rate and that A&U absorbed the sub-agents’ fees in their own commission ([68] of her affidavit of 22 March 2017; and see Ms Morton’s email dated 11 May 2015 – Exhibit 8, CB 7/2578). Ms Morton has deposed (at [69] of her affidavit of 22 March 2017) that it “made sense to me that Selwa had renegotiated my existing agreements, in view of my increased value to Allen & Unwin, while she was negotiating the Books 5 and 6 agreements”. Ms Morton notes that Ms Anthony’s response to this, in her affidavit of 27 April 2017, was “[a]greed”; and that Ms Anthony did not challenge this evidence Ms Morton’s evidence on this topic in cross-examination.

6. [606]

   It is submitted that Ms Morton’s understanding is consistent with the objective meaning of what Ms Anthony said, recognising that there was a problem with the amounts being paid to A&U on the foreign sales of all the books which Ms Anthony was conveying she had now remedied.

7. [607]

   Ms Morton’s evidence is that she did not discover she was paying three full commissions until November 2015 (see her first affidavit at [86]-[95]). She was not cross-examined on this evidence.

8. [608]

   It is submitted that Ms Anthony’s representation in May 2010 was misleading to her knowledge because Ms Anthony was well aware that she had not renegotiated A&U’s 20% or 25% commission; and that it obscured Ms Morton’s true position and prevented her from discovering her legal rights. It is submitted that, as an agent of many years, who claims to have knowledge and understanding of international publishing, Ms Anthony had a duty (both as a fiduciary and as a professional adviser) to disclose the true position to Ms Morton. It is noted that Ms Anthony insisted that all communications with Ms Morton go through her and thus she was the conduit for all information relating to the publishing industry. It is also submitted that Ms Anthony knew that Ms Morton depended upon her for advice.

9. [609]

   In any event, it is noted that the publishing agreements for Books 5 and 6 were entered into on 3 May 2010 which is within the six year limitation period. The amount of loss that Ms Morton suffered in respect of additional commission paid for Books 5 and 6 is said to be $514,558,19 (Exhibit 4).

10. [610]

    Thus it is submitted that Ms Anthony’s claims should be dismissed with judgment for Ms Morton on the cross claim in the sum of $1,913,136.31 (Exhibit 3) (for Books 3 to 6) or, if the cross claim succeeds only for Books 5 to 6 in the sum of $514,558.19 (Exhibit 4), together with interest.

Determination on cross-claim

1. [611]

   The relationship between principal and agent is clearly within the recognised categories of relationship which give rise to fiduciary duties and, as noted earlier, Ms Anthony admits that she owed Ms Morton fiduciary duties (amended statement of cross-claim at [25]; admitted in the defence to the statement of cross-claim at [25]).

2. [612]

   Ms Morton’s pleaded allegation as to breach of fiduciary duty is that, in providing the A&U publishing agreements to Ms Morton for execution and failing to communicate all information relevant to the acceptance of the offers (and in particular as to whether the offers were the most advantageous offers reasonably available in the circumstances), Ms Anthony: failed to act in the best interests of Ms Morton; favoured her own interests over those of Ms Morton; placed herself in a position where her own interests conflicted with the interests of Ms Morton; failed to make full and complete disclosure to Ms Morton of the existence, nature and extent of any conflict of interest that she may have; misused her position for personal gain; failed to act assiduously and diligently at all times to obtain the most advantageous offer reasonably available in the circumstances; and failed to communicate with Ms Morton information material to the agency, including everything known to Ms Anthony in respect of the subject matter of the agency that would be likely to influence the conduct of the principal.

3. [613]

   In Bristol & West Building Society v Mothew [1998] Ch 1 Millett LJ, having earlier observed that “[t]he expression ‘fiduciary duty’ is properly confined to those duties which are peculiar to fiduciaries” (at 16), and that fiduciary duties are to be distinguished from those duties owed by professionals in contract and tort, gave the following description of the duties owed by a fiduciary (at 18):

4. [614]

   The argument at the hearing was broadly focussed on alleged breach of the no-conflict rule (rather than the no-profit rule, notwithstanding that there was an allegation of misuse of position for personal gain). Accordingly, it is necessary to turn to the scope of that rule, before considering the principle that an agent must disclose information material to the agency to his or her principal.

5. [615]

   In Bray v Ford [1896] AC 44 at 51, it was said that:

6. [616]

   In Keppel v Wheeler [1927] 1 KB 577, a real estate agent who had been engaged to sell a property failed to disclose to the vendor a higher offer (made after an earlier offer was made and accepted, subject to settling a written contract). Instead, the agent facilitated an arrangement whereby the second offeror would buy the property from the first buyer. Bankes LJ held that the vendor was entitled to recover from the agent the difference between the two offers as damages, saying (at 586):

7. [617]

   It is not alleged in this case that Ms Anthony had in hand a particular publishing offer which she failed to disclose to Ms Morton. Rather, the complaint is that she failed to advise as to all relevant information in relation to that transaction and failed to disclose the benefits she would (in effect) obtain by divesting the tasks of managing royalties and publishing arrangements from foreign territories if those tasks were sub-licensed through A&U. In that sense I accept that it might be said that this is a case of failure to disclose a personal benefit from the transaction (see, e.g., Brickenden v London Loan & Savings Co [1934] 3 DLR 465 at 469; De Bussche v Alt (1878) 8 Ch D 286) and I address this below.

8. [618]

   However, part of Ms Morton’s contention is that Ms Anthony was simultaneously pursuing the interests of A&U, and possibly her own interests, whilst being under a duty to pursue Ms Morton’s interests; and that those various interests were inconsistent with one another. I will deal with this contention first before moving to others which arise on the pleading.

9. [619]

   Insofar as what appears here to be argued is a conflict between Ms Anthony’s duty to act in Ms Morton’s interests and her interest in preferring A&U’s interests, there is an (admittedly imperfect) analogy with cases where there is a breach of fiduciary duty arising out of a conflict between two interests such as occurs where an agent improperly acts for two principals. In that regard, I note that in Bristol and West Building Society v Mothew, where a solicitor had acted in relation to a loan for both the mortgagor and the mortgagee lender, and where the Court of Appeal in England accepted the argument that the solicitor had breached his duty of care, Millett LJ nevertheless held that there had been no breach of fiduciary duty, saying (at 18-19):

10. [620]

    Millett LJ rejected a submission that the defendant had misled the society as to the particular arrangements which the purchasers had made with their bank (and that therefore the society was not “fully informed”), saying that “[t]he society knew all the facts relevant to its choice of solicitor” and that its earlier decision to employ the defendant despite the potential conflict of interest was a fully informed decision (at 19); and went on to describe the duties owed by a fiduciary who acts for two principals as follows:

11. [621]

    His Lordship said that, whilst the solicitor’s failure in the present case was undoubtedly negligent, it could not be characterised as a breach of fiduciary duty, saying (at 22):

12. [622]

    I do not suggest that this was a situation where Ms Anthony owed a duty to two principals (i.e., to Ms Morton and to A&U). I consider it to be a case where, when negotiating further publishing agreements in relation to Ms Morton’s works (after those entered into for the first two works), Ms Anthony would properly have taken into account the state of the working relationship between Ms Morton and her existing publisher; and that, to do so would not necessarily inhibit the performance by Ms Anthony of the duties owed to Ms Morton. The fact that a world rights deal was the outcome that A&U sought (and that it would benefit therefrom) does not to my mind lead to the conclusion that Ms Anthony was putting A&U’s interests ahead of Ms Morton’s when putting forward and recommending such a proposal.

13. [623]

    In that regard, I consider the references in Ms Anthony’s correspondence to the “peace of mind” of those persons with whom she was dealing at A&U (Mr Gorman and Ms Barlow) to be consistent with Ms Anthony’s informal, conversational, tone of communications. I consider that Ms Anthony genuinely believed that the continuation of the arrangement with A&U was in Ms Morton’s best interests at the relevant time(s). Her recommendation that Ms Morton accept the further world rights deals can more readily be seen as one that suffered from the failure on Ms Anthony’s part to consider or explain to Ms Morton the financial consequences of such a deal than as a diversion by Ms Anthony from her duty to Ms Morton by a desire to pursue the interests of A&U.

14. [624]

    This does not seem to me to be a case where what Millett LJ referred to as the “inhibition principle” was engaged. At all material times, the three parties (Ms Anthony, A&U and Ms Morton) were engaged in a professional (and commercial) relationship which would to some extent see each of them benefited (albeit in different ways) by the same steps.

15. [625]

    Even if it were the case that Ms Anthony can be said to have demonstrated a longstanding partiality to A&U as a publisher (and I do not accept that the evidence does more than establish that Ms Anthony thought A&U to be the right publisher for Ms Morton and that they all worked well together), I do not consider that this would of itself demonstrate an undue commitment as to the interests of A&U in favour of those of Ms Morton. As noted above, I accept Ms Anthony’s evidence that she considered a continuation of the publishing arrangements with A&U to be the best for Ms Morton’s career at the relevant time(s) (see T 162 in relation to Books 3 and 4); and I cannot help but conclude that Ms Anthony did not consider the implications of a continuation of the world rights deal in that regard.

16. [626]

    I consider that what the evidence reveals was a failure by Ms Anthony to exercise due care and skill to consider what was most likely to be in Ms Anthony’s interests at the relevant times (taking into account the overall financial implications thereof) when negotiations occurred in relation to the respective further publishing deals; and demonstrates a seemingly cavalier attitude in that context to the financial consequences to Ms Morton of the world rights deals (“forget the money” – T 171.35; “This is all about money; just money – T 172.10; “we don’t look into just money” – T 180.47; and “I wasn’t thinking of dollars at all” – T 181.24).

17. [627]

    Therefore insofar as the breach of fiduciary duty claim is based on a propounded conflict of interest of the kind considered above, I do not consider that the evidence has made it out.

18. [628]

    A further proposition put by Ms Morton was that there was a potential conflict as between Ms Anthony’s personal interests in a world rights deal insofar as this would necessarily involve much of the work involved in the collection of revenue and other administrative functions in dealing with overseas publishers being carried out by A&U (which Ms Anthony considered had the resources to do and would do so more effectively than her) and her duty to Ms Morton to consider all the ramifications of a world rights, as opposed to a territory by territory, deal.

19. [629]

    The prohibition on having a personal interest which conflicts with a duty owed to the principal is undoubtedly an extremely strict one (McGhee (ed), Snell’s Equity (32nd ed, 2010, Sweet & Maxwell), [7-018]). Examples where such a conflict has been held to exist (see Snell’s Equity, [7-020]) include where a company entered into a contract with a firm of engineers in which one of the company’s directors was a partner and would therefore benefit from the contract (Aberdeen Railway Co v Blaikie Bros (1854) 1 Macq. 461 (149 R.R. 32)); where a director arranged a contract for himself which his company had unsuccessfully sought to obtain for itself (Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443); and where an agent advised a vendor for whom he was acting to reduce her asking price, offered to buy the property himself, and subsequently sold the property at a profit (McKenzie v McDonald [1927] VLR 134).

20. [630]

    The underlying rationale of the prohibition on the holding of a personal interest in a transaction is that interest and duty are likely to conflict; it is an essential aim of fiduciary law to protect the principal from the possibility of such a conflict, which may tempt the fiduciary away from the proper performance of the fiduciary’s duties (M Conaglen, Fiduciary Loyalty (2010, Hart Publishing), 63).

21. [631]

    It may be accepted that an agent might have an interest in a contract or arrangement which reduced his or her own obligations without reducing his or her rate of commission (which is what is here suggested) but whether that is so in a particular case (such as to give rise to a potential conflict) may depend on a number of factors including as to the respective roles performed by the agent (in this case Ms Anthony) and that other party (here, the publisher) and the likely benefits to be derived by the principal on either scenario. I am not persuaded that in the present case I have enough information to balance those factors – Ms Anthony, on the one hand, professes to have been actively involved in managing Ms Morton’s promotion on the international scene; Ms Rejt, on the other hand, paints a different picture of the level of Ms Anthony’s involvement. Moreover, how successful or otherwise Ms Anthony was in that role is not to the point. Nor do I have a clear picture of the financial disparity between Ms Anthony receiving 15% of net revenue (after the A&U and sub-agents’ commissions) and Ms Anthony receiving 15% of gross revenue but herself absorbing overseas publishers’ or sub-agents’ commissions (to the extent that this might have resulted if Ms Anthony had negotiated direct publishing arrangements). In this regard, the real problem, it was submitted for Ms Morton, was not the payment of commission to sub-agents in the translation countries; the problem was that A&U were deducting commission of 20-25% that would not have been payable had Ms Anthony handled the international negotiations herself (see T 452.25).

22. [632]

    I am not persuaded that Ms Anthony made a profit or other benefit, or had a personal interest in the world rights deals inconsistent with her duties to Ms Morton, by reason only of the fact that the world rights deals may have decreased her work as agent. It is not clear to me that there was such a clear discrepancy between Ms Anthony’s effective rate of commission and the work she was doing so as to amount to an “interest” as such in the arrangement (of a kind which would potentially conflict with her duty to Ms Morton).

23. [633]

    The other substantial issue raised by the pleadings is whether there was a fiduciary duty to communicate all information relevant to the acceptance of the offers, and as to whether the offers were the most advantageous reasonably available in the circumstances ([39] of the amended statement of cross-claim).

24. [634]

    As I have already noted, it is not here alleged that Ms Anthony actually had in hand a more advantageous offer which she failed to disclose to Ms Morton. Keppel v Wheeler was clearly such a case; although undoubtedly there was a further breach in that case, namely, that the agent facilitated a secret transaction between the two competing buyers without advising the vendor. However, I am not convinced as to the existence of a fiduciary (as opposed to tortious) duty to communicate all information relevant to the acceptance of the offers, and as to whether the offers were the most advantageous reasonably available in the circumstances. I therefore do not find that a breach of fiduciary duty has been made good in that regard. I also note the view expressed by Dal Pont that the duty to disclose all material information is a duty owed in contract and in tort: it is not a fiduciary duty (see G E Dal Pont, Law of Agency (2nd ed, 2008, LexisNexis), [11.7]):

25. [635]

    I have thus concluded that there was no breach of fiduciary duty. If I be wrong in relation to this, nothing ultimately turns on it, because I consider there was a clear breach of Ms Anthony’s contractual or tortious duty of care (see below) and Ms Morton’s position is that this sounds in the same monetary award as would a breach of fiduciary duty in the present case.

26. [636]

    As noted, Ms Morton has pleaded, and the cross-defendants have admitted ([26] of the amended statement of cross-claim and [26] of the defence to cross-claim), that Ms Anthony owed a duty of care to perform her obligations as an agent with due skill, care and diligence. The amended cross-claim also alleges (at [26]) that Ms Anthony owed a duty to perform her obligations with expertise, being “the expertise of a literary agent representing authors both in Australia and internationally”. The cross-defendants do not admit this last allegation (see [26] of the defence to cross-claim).

27. [637]

    Ms Morton pleads, and the cross-defendants deny, that Ms Anthony breached the said duty by: advising Ms Morton to license exclusively her international rights to a third party who owed Ms Morton no duties, such that neither Ms Morton nor Ms Anthony had direct recourse against the third party; by advising Ms Morton to license exclusively her international rights, which effectively delegated Ms Anthony’s obligations as agent to a third party, without Ms Morton’s informed consent; advising Ms Morton to license her rights exclusively on uncommercial terms, instead of ensuring that those contracts were on the best possible terms; failing to act assiduously and diligently at all times to obtain the most advantageous offer reasonably available in the circumstances; failing to seek and communicate offers from other publishers; failing to license the rights on a territory by territory basis; and failing to improve Ms Morton’s position vis-à-vis her publisher, commensurate with her increasing commercial success ([41] of the amended cross-claim; [41] of the defence to cross-claim).

28. [638]

    Although neither party referred in terms to Part 1A of the Civil Liability Act, it applies in relation to claims for damages for harm resulting from negligence whether those claims are brought in tort or contract (see s 5A(1)) and hence it is necessary to have regard to the relevant statutory provisions when addressing the claims for breach of the (admitted) duty of skill and care in the present case.

29. [639]

    It is first necessary to articulate the matters giving rise to the duty and the scope of the duty of skill and care owed by a literary agent in Ms Anthony’s position to an author in Ms Morton’s position.

30. [640]

    In Hawkins v Clayton (1988) 164 CLR 539; [1988] HCA 15, Brennan J (as his Honour then was) said (at 556):

31. [641]

    In Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59 at [50], the majority of the High Court observed that different classes of case can give rise to different problems in determining the existence and nature or scope of a duty of care; and that the task in such a case is to make a judicial evaluation of the factors which tend for or against a particular conclusion, to be arrived at as a matter of principle.

32. [642]

    In the present case, what is relied upon as giving rise to the duty of skill and care with a scope which included the taking of reasonable care to provide advice as to the advantages and disadvantages of the world rights deals are the salient features of the relationship between Ms Morton and Ms Anthony (as pleaded at [26]), namely that Ms Anthony knew or ought to have known that: Ms Morton relied upon her to perform her obligations as agent with due care, skill, diligence and expertise and to secure the best outcome on any contracts negotiated by her or others with whom Ms Anthony dealt in respect of the works; and that at the time of entry into the agency contract (in 2005) Ms Anthony knew or ought to have known that Ms Morton was an unpublished and inexperienced author, with no experience in business, who relied upon Ms Anthony’s expertise.

33. [643]

    While those matters are not admitted by Ms Anthony, it is clear to me that Ms Anthony appreciated that Ms Morton was an unpublished author at the time that the agency relationship first arose and she must have understood that Ms Morton was relying on her advice in the negotiation of publishing agreements for her works. Indeed, during the course of the relationship, Ms Anthony formed the view that Ms Morton would be well-advised to seek advice in relation to the management of her business affairs (see [45] of her third affidavit), thus suggesting to me that Ms Anthony understood that Ms Morton was not necessarily well-versed in financial or commercial matters and would benefit from advice at least of that kind. There was nothing to suggest Ms Morton was seeking any legal advice as to the publishing agreements and again it must have been apparent to Ms Anthony that Ms Morton was relying upon her for advice in relation to the negotiation of publishing agreements. Ms Morton had no experience in such negotiations as an unpublished author in 2005 and, thereafter, all dealings in relation to the negotiation of contracts were dealt with by Ms Anthony). Those matters inform my conclusion as to the scope of the duty of care which was owed in this case.

34. [644]

    I am satisfied that the relationship between Ms Anthony and Ms Morton was such as to give rise to the (admitted) duty of skill and care and this extended to skill and care in the negotiation of publishing agreements. I consider that the scope of the duty encompassed the giving of advice as to the advantages and disadvantages of particular kinds of publishing deals (including the financial consequences in terms of additional layers of commission payable under a world rights publishing deal). The risk of harm to which Ms Morton was vulnerable (and which eventuated in the present case) was that she would enter into a comparatively financially disadvantageous publishing agreement without knowing that there was an alternative course of action available to her and hence without being in a position to make an informed choice as to whether to grant the world publishing rights. In the face of that risk of harm (which I consider to have been foreseeable and not insignificant) a reasonable literary agent in Ms Anthony’s position would, I consider, have taken precautions against that risk of harm (easily done in the present case) by making clear to Ms Morton the financial advantages and disadvantages of the course there being proposed. There is nothing to suggest that any of the factors to which the Court is to have regard under s 5B(2) of the Civil Liability Act would point against the scope of liability extending to Ms Anthony in the circumstances here under consideration. In particular, there was a high probability of financial loss if Ms Anthony did not give the advice as to the financial consequences of a world rights deal and the requirement that Ms Anthony give that advice was hardly onerous.

35. [645]

    In Artistic Builders Pty Ltd v Nash [2010] NSWSC 1442, a case involving the obligations of solicitors, it was said by Hall J (at [511]-[512]) that:

36. [646]

    In Markson v Cutler [2007] NSWSC 1515 Brereton J was concerned with a claim against a real estate agent who had negotiated the sale of the plaintiff’s house. His Honour said at [27]:

37. [647]

    Brereton J concluded in that case (at [33]) that “the agent was duty bound to obtain and put before the Cutlers all reasonably available relevant information to place them in the best informed and advised position to decide which course to take”. His Honour considered that the discharge of the duty in that case required the real estate agent to make a telephone call to the other persons who had made expressions of interest in purchasing the property to inform them that another purchaser had made an offer of $5 million, in order to see whether the others would be prepared to better that figure. In circumstances where that was not done, “there was a breach of Vameba’s duty as agent assiduously and diligently to elicit the most advantageous offer in the circumstances” (at [35] of his Honour’s reasons).

38. [648]

    Separately, there have been cases (albeit not involving literary agents) where the duty of an agent to perform its obligations with due skill, care and diligence and expertise has been held to extend to explaining risks to the principal. This has occurred in the context of insurance brokers: there, the failure to explain the possibility of certain risks eventuating: see, for example, NMFM Property Pty Ltd v Citibank Ltd (No 10) [2000] FCA 1558; 186 ALR 442 and Artistic Builders Pty Ltd v Nash, to which I have referred above. Rest-Ezi Furniture Pty Ltd v Ace Shohin (Australia) Pty Ltd (1987) 5 ACLC 10 is an example of a case where it was held that the duty of the agent required it to explain to the principal the risks of the transaction (the agent being a futures broker who had failed to give an explanation to its principal of its liability to margin calls in the future following purchase of securities) (however, there, the existence of the duty was conceded and the only question for the court was whether there had been a breach).

39. [649]

    By analogy with the above cases, I find that Ms Anthony owed Ms Morton the duties pleaded at [21](a)-(f), including a duty of care (arising out of the features of the relationship pleaded at [26]) to explain to Ms Morton the financial consequences (in terms of the additional layers of commission payable) of the world rights deals being recommended by Ms Anthony, so that Ms Morton could make a fully informed decision in that regard.

40. [650]

    I also find that the evidence establishes a failure on the part of Ms Anthony to act with the due care and skill of a reasonably competent literary agent: in failing adequately to inform Ms Morton of the advantages and disadvantages of a world rights deal and, in particular, as to the additional layer(s) of commission that would thereby become payable.

41. [651]

    It was submitted for Ms Anthony that advice was given in respect of the two alternatives (world rights versus individual negotiation) by reference to various statements contained in her affidavits in which she asserted that she had explained certain things to Ms Morton and to certain parts of the transcript (see the statements and passages identified at T 432ff).

42. [652]

    In this context, reference was made to the following evidence: to Ms Anthony’s affidavit sworn 29 March 2018 (at [22]) (in which she repeats in effect what was said at [2](86)-(96) of her second affidavit that “I explained to Ms Morton repeatedly that the subagent is not paid by the publisher but takes out 10% commission from their royalty payment before paying Allen & Unwin” (this being contextually in relation to Books 5 and 6)); to Ms Anthony’s first affidavit at [45]-[47], in relation to the A&U offer in respect of Books 5 and 6, in which Ms Anthony notes the terms of the offer made on 13 April 2010 by A&U and simply deposes that she spoke with Ms Morton over the phone (but does not set out any conversation as to the world rights aspect of the deal); to [2](30), (65)-(68) of her second affidavit, in which she recalls explaining to Ms Morton that the international sub-agent would receive the gross local royalties, deduct 10% or the best rate of commission negotiated on behalf of the author, attend to payment of gross local tax and then remit net royalties to A&U (again, this was in the context of Books 5 and 6 and again there is no account given of what was said or any comparison of the financial disadvantages or otherwise of that course); to the statement at [38] of that affidavit that she explained the way royalties beyond the advance were earned and paid to authors and “went over the publishing agreement with [Ms Morton] explaining each of the terms and comparing them with industry standards” (this being in the context of the first publishing agreement for Book 1); to the conversation deposed to at [83] of her 28 September 2017 affidavit in which Ms Anthony says that she explained (in the context of the 13 April 2010 letter in relation to Books 5 and 6) that A&U had dropped the commission to 10% across all the countries; and to Ms Anthony’s account at [86] of that affidavit of a conversation with Ms Morton in 2015 in which Ms Morton raised the issue of the sub-agents’ commissions and Ms Anthony says she told Ms Morton “I have told you many times that you would be paying the sub agents commission in addition to the commission to Allen & Unwin”; to [9] of her affidavit sworn 18 October 2017, in which Ms Anthony deposes to a conversation in relation to the publishing agreement for Book 2 and says she told Ms Morton that it was to her advantage to do a second book as this would enable A&U to do two book deals internationally; to [33]-[35] of her 18 October 2017 affidavit (in which Ms Anthony denies that the sub-agents’ costs caused Ms Morton to suffer loss and deposed that Ms Morton “never asked me to renegotiate any of the publishing agreements. Nor did she ever express dissatisfaction with them prior to November 2015”).

43. [653]

    A number of the passages in the affidavits to which I was taken in that context had only provisionally been read with leave being granted to adduce evidence orally as to the substance of what Ms Anthony recalled she had said; and it is obvious that they amounted to little more than an assertion that explanations had been given.

44. [654]

    My difficulty with the submission for Ms Anthony in this regard is that in none of the evidence referred to above is there any advice or comparison said to have been given as to the advantages and disadvantages of the alternative options (a world rights deal and a territory by territory deal). The response to this for Ms Anthony was that the alternative option was that Ms Anthony did not have to sign the agreements “or she could have signed a lesser agreement which would have confined the rights to lesser territories” but that is no real answer. Obviously Ms Morton had a choice whether to sign the publishing agreements – the question is whether she was properly advised as to the option between signing the agreements presented to her containing the world rights options and not signing those agreements but having Ms Anthony negotiate direct with foreign publishers on a territory by territory basis. Telling Ms Morton that sub-agents would deduct a commission or that A&U had dropped its commission is hardly an explanation of the alternatives that were then available to Ms Morton for the grant of publishing rights (or the financial consequences to her of world rights deals versus territory by territory deals).

45. [655]

    As to the evidence given orally by Ms Anthony, reference is made for Ms Anthony to the following: T 89.42-90.24 (relating to Books 5 and 6); T 91.3-91.9; T 96.5-96.37 (again in relation to Books 5 and 6); T 98.11-98.24; T 100.24-100.49 (in relation to Books 3 and 4); T 101.8-101.47; and then in cross-examination at T 157.3-157.38 (relating to Books 3 and 4); T 159.18-159.48 (again in relation to 2007); T 162.10-162.42; T 164.19-164.44; T 165.27-165.42; T 166; T 171.35-172.12; T 174.6-175.7; T 176.35-176.40 (in relation to Books 5 and 6); T 179.25-179.36; T 182.4-182.24; T 184.15ff; T 188.19-188.42; T 190; T 191.33-192.1. Senior Counsel for Ms Anthony concedes that many of the above references were “disparate” but submits that in the overall sense they provided a sufficient basis to answer my question as to where there was evidence as to advice in respect of the pro’s and cons of the alternative options.

46. [656]

    I have re-read all of the transcript (including those references highlighted by Senior Counsel for Ms Anthony) and I am left with the same impression that I had when the evidence was given orally in the witness box, namely that there is no reliable evidence of any adequate explanation being given to Ms Morton of the fact that an alternative option to the grant of world rights to A&U would have been for Ms Anthony to negotiate direct with foreign publishers; nor of any adequate explanation as to the financial disadvantages of the former course.

47. [657]

    I accept that Ms Anthony genuinely formed the view that it was in Ms Morton’s best interests, at the relevant times, to remain with A&U and for A&U be granted world wide publishing rights. However, even if that professional opinion fell within the range of views reasonably open to a reasonably competent literary agent at those times, the fact remains that I am not satisfied that Ms Anthony gave a sufficient explanation to Ms Morton of the advantages and disadvantages of the course that she was recommending; or of the alternatives open to Ms Morton in that regard.

48. [658]

    While I have been unable to uncover a case in the context of the literary agency or publishing industry with comparable facts, the evidence of Ms Darling and Ms Martyn (consistent with the experience of Ms Rejt as a publisher) is sufficient to make good the proposition that even though Ms Anthony’s professional opinion that the foreign rights deals were in Ms Morton’s best interests may have fallen within the range of acceptable opinion on the part of a reasonably competent professional literary agent (though in my opinion the evidence of Ms Darling and Ms Martyn suggests otherwise), the failure (as I have found) of Ms Anthony to make clear to Ms Morton the financial consequences of such a deal means that Ms Anthony’s conduct did not satisfy the duty of skill and care owed to Ms Morton. It is not to the point to say that Ms Morton did not express dissatisfaction with the deals or ask for them to be re-negotiated (until 2015). I accept Ms Morton’s evidence that she relied upon her agent to represent her interests in the negotiations with publishers and to give her advice as to the agreements being presented to her. That, surely, is what authors (among other things) engage literary agents to do.

49. [659]

    Thus I find a breach of duty of care and skill in relation to the recommendation given (implicit in the presentation to Ms Morton of the publishing agreements for each of Books 3 to 6) that Ms Morton enter into world rights publishing deals in relation to Books 3 to 6 without adequately explaining the financial consequences thereof.

50. [660]

    I note that I have not addressed the contention that it was a contractual term of the contract between the two that Ms Anthony not delegate her role as agent. This was not explored in submissions or oral argument and, while this was clearly a contract for the provision of personal services, it is difficult to see a basis for implying a term that Ms Anthony could not delegate at least some of the tasks of agent to others.

51. [661]

    Lastly, although I do not accept that Ms Anthony had an “interest” in the world rights arrangement by reason only of the fact that the world rights deals may have decreased her work such that there was a conflict of interest, I do consider that Ms Anthony breached her duty to keep her principal (Ms Morton) informed about matters which were of concern to the principal or were material to the agency (see, as to that duty, Bowstead & Reynolds on Agency, [6-021]; Dal Pont, Law of Agency, [11.7]) by failing to draw Ms Morton’s attention to the terms of the publishing agreements which had the effect of reducing Ms Anthony’s personal obligations without reducing her commission. That is because those terms were highly likely to affect Ms Morton’s interests.

52. [662]

    One illustration of the relevant principles is that an agent who is engaged to secure the sale of a property on behalf of a vendor has a duty to convey to the vendor any material information or advice which the vendor should know in order to guide him in transacting the business (Georgieff v Athans (1981) 26 SASR 412 at 415). In that case, a selling agent had recommended to the vendors (who did not speak English well) an offer which, although containing the price which the vendors had sought, contained a “completely obscure” and uncertain set of special conditions under which the purchase price would not be paid until the purchaser had effected a sub-division or on-sold the land. Walters J found that when providing such an offer to the vendors for their consideration, “there was a duty on the [agent] … to warn the [defendants] of the risk attaching to the contract and not to leave the obscurity of those conditions unresolved”. There had been a breach of the agent’s duty of care, in circumstances where there was no explanation of the terms to the vendors.

53. [663]

    The decision in Georgieff v Athans was followed by the Supreme Court of Queensland in Havas v Cornish & Co Pty Ltd [1985] 2 Qd R 353. That might be described as a case not so much about material terms as about material events. In that case, a vendor’s agent failed to disclose to the vendor a letter in which a purchaser notified the vendor that it could not complete the contract. In the intervening period, the vendor erroneously proceeded on the understanding that the contract was unable to be rescinded, and lost the opportunity of entering into a more advantageous contract. Vasta J considered that “[i]t was the obligation of the defendant, the moment it had any knowledge that the purchaser was reluctant to fulfil the contract, to keep its principal fully informed at all times in order to allow the principal to be in a position to make a proper judgment of the situation” (at 361); and concluded that the agent had breached this duty; and that this resulted in a loss of the opportunity to obtain the more advantageous contract.

54. [664]

    I conclude that Ms Anthony’s duty of skill and care owed in contract and tort required that she draw Ms Morton’s attention to material features of the arrangement which were likely to affect Ms Morton’s decision making. It was clearly a material feature of the world rights arrangements that Ms Anthony’s duties as agent (in that context) would be reduced to almost nil, whilst Ms Anthony continued to obtain the same rate of commission. 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.

55. [665]

    As already noted, Ms Anthony, in her defence to the cross-claim, pleads (at [59(c)]) that such claims were brought more than six years after any cause of action accrued and, therefore, outside of the statutory limitation period. Further, and in respect of the purely equitable claim for breach of fiduciary duty, Ms Anthony submits that the Court should apply the six year limitation period by analogy. Both arguments proceeded on the basis that the Ms Morton’s claim was “brought” on 7 October 2016, being the date when her cross-claim was filed.

56. [666]

    Senior Counsel for Ms Morton accepted (at T 458.1-458.4) that the limitation period would apply by way of analogy to its claim for equitable compensation for breach of fiduciary duty due to the correspondence between the remedy of equitable compensation and a claim for damages for breach of a duty of care in tort and contract. However, it was argued that as a consequence of s 74(1) of the Limitation Act, the relevant date when the claims were brought was not 7 October 2016, but 23 March 2016, the date when Ms Anthony filed her original summons.

57. [667]

    Section 74(1) of the Limitation Act relevantly provides:

58. [668]

    The effect of s 74 is to deem the time at which a cross-claim is taken to have been brought as the earliest date on which the person against whom the claim is made became a party to the proceedings (see Weston v Publishing & Broadcasting Ltd [2011] NSWSC 433 at [249]; 83 ACSR 206). The point is illustrated by O’Neill v Foster. The plaintiff in that case commenced proceedings against the first defendant seeking an adjustment of property interests under the Property (Relationships) Act 1984 (NSW). That claim was filed on 9 August 2002. The defendant filed a cross-claimed on 22 January 2004 for trespass to the person. Campbell J, as his Honour then was, held that by reason of s 74(1)(b) the cross-claim was treated as being brought on the earlier of those two dates, namely, 9 August 2002.

59. [669]

    The statutory limitation in s 14(1) of the Limitation Act therefore does not apply to the claims in respect of Books 5 and 6. The publishing agreements for Books 5 and 6 were entered into on 3 May 2010. Although the alleged breaches of Ms Morton’s duties must have occurred before then, A&U did not approach Ms Anthony with a formal offer for world rights to Books 5 and 6 until 13 April 2017 (Exhibit 8, CB6/2380), which is within the six year time period given that proceedings are treated under s 74 as having been commenced on 23 March 2016. Until such an offer was made, there was no offer in existence for Ms Anthony to provide to Ms Morton for execution, nor an offer upon which to provide information relevant to its acceptance in the circumstances. I conclude that 3 May 2010 is the date on which the cause of action in respect of Books 5 and 6 accrued in Ms Morton for the purpose of s 14(1) of the Limitation Act and therefore less than six years had expired as at the time the summons was filed on 23 March 2016 in respect of those causes of action. (I consider, and it was not disputed at the hearing, that the causes of action in both contract and tort accrued at the same time.)

60. [670]

    In respect of Books 3 and 4, Ms Morton submitted that although more than six years had passed since the formation of the A&U contracts on 9 July 2007 and the date the original summons was filed (23 March 2016) Ms Anthony had fraudulently concealed any relevant causes of action with the effect that, under s 55 of the Limitation Act, the limitation period had been suspended (T 458.39-458.41). Section 55 relevantly provides:

61. [671]

    Despite s 55 not being confined to common law fraud, it is not sufficient merely to show that taking advantage of the statutory limitation would be unconscionable or inequitable in the broad sense of those terms. Generally, there must be consciousness that what is being done is wrong or that to take advantage of the relevant situation would involve wrongdoing (Seymour v Seymour at 372 (Mahoney ACJ); Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181 at [75]-[76] (Meagher JA)).

62. [672]

    The suspension of the limitation period under s 55 will expire upon the first to happen of two things (Ballard v Multiplex [2012] NSWSC 426 at [94] (McDougall J)). One is the claimant discovering the fraudulent concealment itself. The other is the time when the claimant, acting with reasonable diligence, might have discovered the fraudulent concealment. In respect of the latter, the burden is on the claimant to establish that the fraudulent concealment could not have been discovered without having to take unreasonable steps (Ballard v Multiplex at [106]). The applicable standard is how a person carrying on a business of the relevant kind would have acted if they had adequate but not unlimited resources and were motivated by a reasonable sense of urgency (Paragon Finance plc v DB Thakerar & Co [1999] 1 All ER 400 at 418 (Millett LJ)).

63. [673]

    I have already referred to the evidence given by Ms Morton as to the email she received from a literary agent in the United States, Ms Park, in May 2010 in which Ms Park informed her that she was “basically losing” 20-25%, depending on her contract, of all foreign income to the primary publisher, and then paying another 15% commission on top of that; and to the conversation Ms Morton said she then had with Ms Anthony in which the latter told her that she had “fixed things”.

64. [674]

    For Ms Morton it is submitted that, by stating “I’ve fixed things so that you’re now only paying 10% to Allen & Unwin”, Ms Anthony made a representation which concealed any cause of action Ms Morton might have had and that that statement was, to her knowledge, misleading, because she knew that she had not renegotiated the 20% or 25%. It is argued that, as at the date the email exchange took place, the limitation period was suspended; and that it did not begin to run again until the cross-claim was filed on 7 October 2016 (T 461.14-461.18). Because less than six years had run between the date on which Ms Morton entered into the Allen & Unwin contracts for Books 3 and 4 (namely, 9 July 2007) and the date of the allegedly fraudulent concealment (May 2010), the statutory limitation did not apply to the claims in respect of Books 3 and 4.

65. [675]

    In order to engage the postponing provision in s 55(1), it is necessary to establish that the cause of action has been fraudulently concealed. I consider now whether that proposition has been made good in the present case. I also consider, below, an obstacle which was not raised by either party at the hearing, which arises because the “concealment” pleaded by the cross-claimant is a “supervening” concealment which arose after the cause of action arose. There is academic commentary raising doubt as to whether s 55(1) extends to such concealment, but it is not necessary for me to decide the case on that basis.

66. [676]

    There is some heterogeneity in the cases in which the fraudulent concealment exception to the running of limitation periods has been applied or (more often) rejected by the courts.

67. [677]

    One category of case, of which State of New South Wales v Mulcahy [2006] NSWCA 303 and Faraday v Rappaport [2007] NSWSC 34 are examples, is one where there is simply no concealment. For example, in State of New South Wales v Mulcahy, the difficulty was that the plaintiff must always have known about the cause of action because, having been the victim of the tortious conduct of the police, he must have known at all times that the police conduct was wrong. In Faraday v Rappaport, the fact that the defendant denied having possession of the converted items did not postpone the limitation period in respect of conversion because the defendant “denied the facts which give rise to the cause of action. He did not conceal [the cause of action]”. It is a little difficult to draw reliable propositions from the authorities in this category, which largely turn on the facts of the individual case.

68. [678]

    A second category, which includes Seymour v Seymour, Hamilton v Kaljo (1989) 17 NSWLR 381 and others, could be said to include cases where there was concealment for which the defendant was responsible, but no fraudulent conduct on the part of the defendant in that regard has been established. Cases in this category often speak in terms of the Court lacking satisfaction that there was “dishonesty”, “moral turpitude”; actual consciousness of wrongdoing; or “wilful” concealment.

69. [679]

    Of course, in assessing the cases, it should be noted that the fraudulent concealment exception is just that – an exception – and is not co-terminous with cases where the plaintiff actually knows of the illegal conduct. There may be many cases where the cause of action never becomes obvious to or reasonably discoverable by the plaintiff, yet the defendant has done nothing fraudulent to conceal it. It is also necessary to understand the exception in the context of the whole scheme of limitation by statute. I have therefore endeavoured to resist the temptation to distil neat propositions from the cases.

70. [680]

    Turning first to the cases where there had been no concealment, in Faraday v Rappaport, White J (as his Honour then was) rejected an argument that the postponement in s 55(1) applied. In one of the proceedings in which his Honour there gave judgment, the plaintiff, the late Rosalia Rappaport, had before her death commenced a claim in detinue against her brother Steven Faraday. Rappaport had alleged, and White J accepted, that in January 1989, Rappaport deposited money, a gold ring, and a gold bullion piece with Faraday for safekeeping (see [120]). However, White J held that the cause of action in detinue had accrued in 1992 when Rappaport made demand for return of the goods. This would mean that the limitation period expired in 1998 (well before the proceeding was commenced).

71. [681]

    Rappaport’s counsel argued that she had the benefit of s 55(1) because, when Rappaport made demand for the return of the goods, Faraday denied that he had them (indeed he maintained that denial up to and including the hearing of the matter). There were other problems with the reliance on s 55(1) (in particular, the fact that Rappaport had not pleaded fraudulent concealment; and that White J considered that the cause of action was discoverable with reasonable diligence based on documents on Rappaport’s possession). However, what is of present relevance is that White J said the following in relation to the key phrase “fraudulently concealed” (at [127]):

72. [682]

    A second case where “concealment” itself was held to be absent was State of New South Wales v Mulcahy (Hodgson, Tobias and Bryson JJA). There the issue was whether the plaintiff’s claims for damages for assault, false imprisonment and misfeasance in public office were relieved by s 55(1)(b) of the limitation period which would otherwise apply. The causes of action were all founded upon events in February 1991, during which time the plaintiff was arrested, assaulted by police and held in custody for two months. The fraudulent concealment argument hinged on the allegation that the plaintiff was notified in about July 2002 by the Police Integrity Commission that Mr Nimmo – one of the police officers involved in the 1991 incident – had admitted that evidence that the plaintiff had admitted offences was fabricated and had also admitted some tortious acts; and that another officer, Mr Lennon, had also made some partial admissions. Bryson JA (Hodgson and Tobias JJA agreeing) rejected the contention that the facts indicated a fraudulent concealment of the causes of action, observing (at [10]) that “[t]he facts, including the falsity of the police evidence, must always have been known to Mr Mulcahy and it cannot be said that his cause of action was concealed from him”; and, later in that paragraph, that “these causes of action … were known to Mr Mulcahy from the beginning”.

73. [683]

    Turning then to the second category of cases – where fraudulent concealment arguments have been rejected on the basis that the requisite dishonesty was absent – in Shire of Toodyay v Merrick [2016] WASC 29, the Western Australian Supreme Court proceeded, on the application of a similar statutory provision, on the basis that (at [174]) “the word ‘fraudulently’ denotes some form of dishonesty or moral turpitude, a consciousness that what is being done is wrong or a consciousness that to take advantage of the relevant situation involves wrongdoing”. Importantly, in that case, which involved an action, brought out of time, to recover overpayments made to a chief executive officer of the Shire, the submission was that “Mr Merrick knew that the amounts he was claiming were in excess of his entitlements, and had a duty to bring this to the attention of the Shire”. The Supreme Court (Acting Master Gething) rejected the fraudulent concealment contention, saying (at [143]):

74. [684]

    In Hamilton v Kaljo, it was contended that the causes of action were fraudulently concealed when the directors failed to disclose to outside shareholders of the company “the entry by [the company] into the distribution agreement and charge, the terms of the distribution agreement, and the cessation of business by [the company], or their breaches of duty”. McLelland J (as his Honour then was) rejected the argument that the limitation period had been postponed. His Honour noted the somewhat unusual relationship between the company and the outside shareholders which, apparently for taxation purposes, involved consistently minimal communication. His Honour said that he “did not discern any attempt to conceal the relevant matters”; but “in any event and more fundamentally”, his Honour was “not satisfied that at any material time any of the directors … was conscious of any wrongdoing in relation to the transaction in question, or conscious that there was any aspect of it which should be concealed from the Commissioner of Taxation or indeed anyone else”. His Honour noted that the directors “were acting on legal advice in relation to what was at the time a commonplace kind of transaction” (which, as I interpret the decision, in the particular circumstances weighed against the likelihood of dishonest wrongdoing, although one can conceive that those factors might not always do so).

75. [685]

    In Hamilton v Kaljo, McLelland J referred to Inca Ltd v Autoscript (New Zealand) Ltd [1979] 2 NZLR 700 (at 711) where Mahon J said:

76. [686]

    In Seymour v Seymour, Mr Lewis, a solicitor, was the nephew of Mrs Seymour, who had an ownership interest in some realty. Mr Lewis acted in relation to the realty, but made a mistake as to the nature of the ownership interest of Mrs Seymour, which had the result that Mrs Seymour maladministered the property; part of the property was transferred to the third respondent; and part of the property was sold. Mrs Seymour in fact had had only had a life interest in the property.

77. [687]

    The plaintiffs, who were various relatives of Mrs Seymour who suffered loss as a result of these dealings, sued Mrs Seymour and also sought damages in negligence against the solicitor. The primary judge held that there was no duty of care owed to the plaintiffs but, if there had been, any action in negligence was time-barred and there had been no fraudulent concealment. Mahoney ACJ (with whom Meagher JA and Abadee AJA agreed) held that there was a duty of care owed and that damage accrued, and the cause of action was completed, when the solicitor caused the contract with Mr and Mrs Walker to be completed by transfer (which had the effect of destroying the parties’ equitable interest in remainder) which occurred in 1980.

78. [688]

    As to whether there had been fraudulent concealment, such as to postpone the running of the limitation period, the submission was that, after receipt of a letter from Mrs Field’s solicitors in April 1986, Mr Lewis became aware that he had been negligent and, at that point, honesty required that he bring this to the notice of the plaintiffs so that they could, before the expiry of the limitation period, commence proceedings against him. The submission made was that “he did not notify them in order to protect himself” (see at 372).

79. [689]

    Mahoney ACJ said that nothing had been put to Mr Lewis to suggest “the kind of dishonesty” involved in that allegation. His Honour held that no finding of dishonesty was available and accordingly s 55(1) was not engaged.

80. [690]

    His Honour also said (at 372) that, for the purpose of the phrase “fraudulently concealed”:

81. [691]

    Lastly, to conclude my review in relation to the “dishonesty” requirement, in Nupponen v Hymix Quarries Pty Ltd (Supreme Court (NSW), Foster J, 24 October 1986, unrep), the plaintiff had received injuries in an accident at his workplace. Approximately two years later, the plaintiff was dismissed on the basis that there was no longer any light work available for him. At that time, the plaintiff asked the manager to tell him “what will happen if I can’t work because of my injuries, can I apply for compensation?” to which the manager responded, “Yes, even after ten years because this accident has been registered”. It was argued by the plaintiff that this conversation had the effect of fraudulently concealing the cause of action which he now advanced (which, although it does not appear from the judgment, seems likely to have been a claim for damages in tort).

82. [692]

    Foster J observed (at 4) that “some form of deliberate or reckless concealment of the cause of action is required before the conscience of the defendant or his appropriate servant or agent has been relevantly tainted”. His Honour rejected the argument that there was any such deliberate concealment, placing weight on the fact that the manager was only asked for advice in relation to workers’ compensation and not in relation to possible causes of action against the employer.

83. [693]

    Foster J’s decision, in my view, indicates that there must be concealment together with recklessness or some other form of wrongful misconduct as to the concealment. It is not enough that the individual concerned was proceeding in a general state of negligence or indifference as to the advice being given or the action being taken. (I also note in that regard what was said in Hamilton at 388B.)

84. [694]

    I turn now to some cases which I do not find sufficiently analogous to the present case to be of assistance, but which should be mentioned for completeness. Levy v Watt [2012] VSC 539 (affirmed on appeal in Levy v Watt [2014] VSCA 60) is a recent Victorian authority on the equivalent of s 55(1)(b). There, Habersberger J concluded (at [82]) that time did not begin to run on the date of the theft of a painting because the thief had fraudulently concealed the deprived owner’s right of action (in conversion) by concealing his identity; therefore, s 27(b) was applicable and the conversion action was not barred by the statute (subject to a finding that the present holder of the painting was a bona fide purchaser for value). Levy v Watt concerns substantially different circumstances to the present case and I do not think it assists here, but it is appropriate to note it as one of the most recent authorities on the topic, which was affirmed by an intermediate appellate court.

85. [695]

    In Mann v Commonwealth [2000] NSWSC 353, the plaintiff brought a range of claims for breach of confidence, breach of contract, negligence and misrepresentation, relating to the act of individuals within certain government departments in disclosing documents to the defendant to proceedings in defamation which the plaintiff was pursuing in the United Kingdom. The claims were well out of time unless an exception to the limitation period could be established. The submission as to fraudulent concealment was that the various individuals concerned failed to disclose what they had done to the plaintiff (at [73]); that whether this arose from a misconception of the existence or scope of their obligation of confidentiality to the plaintiff made no difference (at [74]); and that had the government had a proper understanding of its obligations, they would have known that they had breached them and at least disclosed that breach to the plaintiff (at [75]). Newman J rejected the fraudulent concealment argument, concluding that there was nothing in the evidence pointing to dishonesty on the part of the Commonwealth officer who dealt with the disclosure of the documents (at [79]). In relation to the conduct of officers of the New South Wales executive, similarly, there was no evidence of dishonesty: at [81]. Accordingly, the claim was statute barred.

86. [696]

    I interpose here that the “fraudulent concealment” relied on by Ms Morton is not any omission or failure to advise on the part of Ms Anthony but, rather, the making of an express representation which was misleading. (Ms Anthony denies the making of that representation, saying the conversation as alleged never occurred: see [58]-[59] of her third affidavit. However, on the balance of probabilities I am persuaded that a conversation to the effect deposed to by Ms Anthony must have occurred, since otherwise Ms Morton’s conduct in not pressing the issue at that stage is not explicable and because Ms Anthony’s justification or explanation of having fixed things by renegotiating the commission rates for Books 5 and 6 – but not retroactively – is logically premised on an understanding that Ms Morton had raised an issue that required fixing in some sense.)

87. [697]

    I also note, for completeness, that a strikingly different interpretation has been placed upon the equivalent of s 55(1)(b) in at least England. In one relatively early case, Lord Denning MR said that the provision used the word “fraud” “in the equitable sense to denote conduct by the defendant or his agent such that it would be ‘against conscience’ for him to avail himself of the lapse of time” (Applegate v Moss [1971] 1 QB 406 at 413). It appears that that is still the view taken in England, but the difference in Australia is clear, as the High Court noted in Commonwealth of Australia v Cornwell (2007) 229 CLR 519; [2007] HCA 16 at [41].

88. [698]

    I conclude, on the application of the above authorities, that the conduct of Ms Anthony did not amount to fraudulent concealment within the particular meaning in s 55(1)(b). The representation made by Ms Anthony that “I’ve fixed things” falls within the category contemplated by Hamilton and Seymour, which were both cases where something was done in the context of a relationship of trust and confidence which was wrong, misleading or negligent, but which lacked actual moral turpitude or wilful or reckless wrongdoing. The authorities reviewed above clearly indicate that dishonesty is crucial. I am not satisfied to the necessary standard which would apply to such a finding that Ms Anthony was set on a course of actual or deliberate wrongdoing when she made the relevant misrepresentation to Ms Morton. I am not satisfied that she set her mind to concealment during the May 2010 conversation. I think it far more likely that this is another instance of Ms Anthony being (not intentionally) imprecise in her expression (and/or “woolly” in her thinking). Therefore, even if this is a case where there was concealment (in contrast to the first category of cases which I have described above), I conclude that it was not dishonest and the authorities are therefore clear that s 55(1)(b) does not apply.

89. [699]

    The other difficulty with Ms Morton’s submissions as to fraudulent concealment (but not one which was addressed in argument) is that the authorities and commentary indicate that “[f]raud after the period has begun does not suspend the running of time” (see Peter Handford, Limitation of Actions: The Laws of Australia (3rd ed, 2012, Thomson Reuters), [5.10.480]; citing Tito v Waddell [No 2] [1977] Ch 106, at 245-246).

90. [700]

    This issue arises because, by the time of the May 2010 conversation, the time limit imposed by s 14(1) of the Limitation Act in respect of Ms Anthony’s breaches of contract and tortious duty of care in relation to Books 3 and 4 had been running since (probably) 9 July 2007 (when the A&U publishing agreement for those books was signed).

91. [701]

    In Tito v Waddell (No 2), Megarry V-C noted the “general principle” that “once time begins to run, it runs continuously”, and went on to say (at 246):

92. [702]

    In a 1995 article (A McGee, “Subsequent Concealment of Material Facts” (1995) 111 Law Quarterly Review 580), Andrew McGee explained:

93. [703]

    McGee then notes that the conclusion that time is merely “suspended”, though attractive in its simplicity, is simply not open from the words of the section. (I note in passing that the argument for Ms Morton proceeded on the basis that the suspensory effect was the right one. It was not suggested that the time would be reset to zero as at May 2010.) McGee points out that other provisions in the Limitation Act provide expressly for the suspension of the running of the limitation period, such as the provision for the period to be suspended during a person’s disability (in New South Wales, see Limitation Act s 52). On one view, there is a serious possibility that the gap is deliberate (that being the view expressed by Lord Lloyd in Sheldon v R.H.M. Outhwaite (Underwriting Agencies) Ltd [1995] 2 WLR 570), which could be taken to indicate that the gap is one which should be left alone rather than filled by the courts.

94. [704]

    Tito v Waddell (No 2) concerned dealings between the Banabans, the occupants of Ocean Island, a small island in the Pacific, on the one hand, and successive British companies and commissioners which held licences to mine the phosphate on the island, on the other. Relevantly, in 1947, the commissioners negotiated with the Banabans for the acquisition of most of the remaining phosphate land on Ocean Island, with an area of 671 acres. A writ was issued in 1971 by the Banabans against the commissioners, claiming, amongst other things, that the rates of royalty payable under the 1947 transaction were inadequate.

95. [705]

    On September 21, 1948 (18 months after the entry into the 1947 transaction), Sir Albert Ellis, who had known the Banabans since 1900, and had been the New Zealand British Phosphate Commissioner since 1920, made a presentation to a group of the Banabans during which a Mr Rotan wrote on a blackboard some figures showing under the heading “Royalties” the rates of royalty payable to the Banabans and the rates payable to the government. Those figures were incorrect: they stated that the government royalty had remained at an unchanged 6d (when in fact it had increased). That was not known to the Banabans. In the pleadings, the defendants raised the statute of limitations as a defence. The plaintiffs contended that the blackboard exercise amounted to fraudulent concealment. Megarry V-C rejected that argument, saying at 245:

96. [706]

    Were I persuaded that Ms Anthony’s concealment was fraudulent, I would need to consider this issue further (and I would have sought further submissions since the issue was not addressed in the course of argument at the hearing). However, given the conclusions I have reached above, it is not necessary to do so.

97. [707]

    Accordingly, I find that the claims made in relation to Books 3 to 4 are statute-barred.

98. [708]

    The defences based on laches, acquiescence and delay can be briefly addressed in light of the conclusion that the claims made in relation to Books 3 to 4 are statute-barred.

99. [709]

    Mere delay is not sufficient to engage the doctrine of laches: there must be something more to engage the equitable defence: for example, the causing of practical injustice to another party. In Lindsay Petroleum Co v Hurd (1873-4) L.R. 5 P.C. 221 at 239, Lord Selborne said:

100. [710]

     In any event, laches is an equitable defence and not available in answer to a legal claim: Orr v Ford (1989) 167 CLR 316 at 340; [1989] HCA 4 (Deane J). Therefore it is not necessary to consider the application of the doctrine of laches to the claim based on the breach of the contractual or tortious duty of care.

101. [711]

     As to the claim for breach of fiduciary duty, a principal may be barred from bringing a claim for breach of fiduciary duty by the doctrine of laches, although not where the limitations legislation expressly provides a limitation period (such as if the claim involves a breach of trust): see Snell’s Equity, [5-019], [7-063]. However it is not necessary further to consider this where I have not concluded that there was a breach of fiduciary duty.

102. [712]

     To the extent that they go beyond the laches defence, I would dismiss the delay and acquiescence defences. I accept that Ms Morton, having raised the issue in May 2010, was satisfied by Ms Anthony’s response in the sense that she considered her concerns had been allayed. Although I am not persuaded that Ms Anthony fraudulently concealed the true position in that regard, I do not accept that Ms Morton’s conduct in not raising the issue again until late 2015 amounts to acquiescence in a position about which she had clearly complained (and thought had been “fixed”) and I do not accept that there has been sufficient delay in raising the issue to amount to laches or otherwise to preclude the claims now made in relation to Books 5 to 6.

103. [713]

     The allegation of failure to mitigate (at [59](a) of the defence to cross-claim) is an allegation that if Ms Morton did suffer any loss or damage (which is denied), the loss or damage was: (i) caused or contributed to by her own conduct or (ii) caused wholly or in part by her failure to take any or any reasonable or effective steps to mitigate her loss or damage. No particulars of this allegation are provided in the pleading.

104. [714]

     As I have noted elsewhere (see Chand v Commonwealth Bank of Australia [2015] NSWCA 181 at [180]), although often expressed as a “duty” to mitigate loss (see, for example, British Westinghouse Co v Underground Railway [1912] AC 673 at 689; The Mortgage Corporation v Halifax (SW) Limited [1999] Lloyd’s Rep P.N. 159 at 182), there is no “duty” owed to the party in breach in the sense of an independent obligation owed by the innocent party (as recognised in The Mortgage Corporation v Halifax (SW) Limited at 183). Rather, the principle is that the plaintiff (or in this case Ms Morton as cross-claimant) can only recover for loss caused by the wrongdoer’s breach and cannot recover for what McGregor on Damages terms “avoidable loss” (H McGregor, McGregor on Damages (19th ed, 2014, Sweet & Maxwell)), i.e., loss consequent upon the defendant’s breach that could by reasonable action have been avoided (see from [9-014]; see also Sotiros Shipping Inc. and Aeco Maritime S.A. v Sameiet Solholt (The “Solholt”) [1983] Lloyd’s Rep 605 per Sir John Donaldson MR at 608).

105. [715]

     The question here, therefore, is whether Ms Morton acted unreasonably in not taking positive steps to reduce the loss suffered as a result of entry into the world rights deals put forward by her agent. It is by no means clear what Ms Anthony suggests that Ms Morton should, acting reasonably to avoid such loss, have done. By the time Ms Morton had become aware of what Ms Park advised her was the common practice in relation to the licensing of foreign publishing rights she was already a party to publishing agreements in which the right to sub-license those rights in other territories had been given to A&U.

106. [716]

     The party raising a failure to mitigate defence bears the onus of proving that the innocent party did not act reasonably to mitigate his or her loss caused by the wrongdoer’s breach (see Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 22; [1995] HCA 5; St Vincent’s Hospital (Melbourne) Inc v University of Adelaide [2002] VSC 297 at [36]; Knott Investments Pty Ltd v Fulcher [2013] QCA 67; [2014] 1 Qd R 21 at [26], [43]-[46]).

107. [717]

     In Medlin v State Government Insurance Commission (a case of negligence) the plurality (Deane, Dawson, Toohey and Gaudron JJ) emphasised (at 13) that any question of reasonableness should be framed in terms of what is reasonable in terms of the context of assessing damages for negligence. In The Mortgage Corporation v Halifax (SW) Limited (at 182), it was said that the plaintiff’s conduct in not taking positive steps to reduce his or her loss will not be weighed in nice scales at the instance of the party who has occasioned the loss (see Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452; and see Orica Investments Pty Ltd v McCartney [2010] NSWSC 488 per Ball J at [56]).

108. [718]

     Here, while there was a suggestion that it was open to Ms Morton to have sought legal or other advice as to the publishing agreements into which she entered, or to have sought to re-negotiate the world rights deals (and to have consulted with Ms Anthony in that regard), this was not suggested to be in any way causative of her loss (nor could it be suggested that she had some duty to second-guess her own agent’s advice as to the publishing agreements being put before her).

109. [719]

     In my opinion the claim of failure to mitigate must fail: Ms Morton raised the issue as to multiple commissions with Ms Anthony in 2010; I accept that she trusted in Ms Anthony’s explanation at that stage that Ms Anthony had “fixed” things (even though I accept that there was room for debate as to what that meant); and I find that when Ms Morton learnt that Ms Anthony had not in fact “fixed things” in relation to Books 1 to 4 (and had only partially rectified the position in relation to Books 5 to 6), Ms Morton did what it would have been equally open to Ms Anthony in 2010 to do – she (through her new agent) negotiated the termination of the world rights publishing deals and the entry by Nightofficer into new publishing agreement with A&U which did not include such a term.

110. [720]

     The defence based on failure to mitigate does not succeed.

111. [721]

     The loss claimed by Ms Morton in effect is the amount of commission paid to A&U for (relevantly in light of my above findings) its sub-licensing of Books 5 to 6 (which Ms Morton says would not have been paid had Ms Anthony negotiated direct with the sub-agents).

112. [722]

     For Ms Anthony it was submitted that a fundamental defect in the cross-claim is that there is an unproven assumption at its heart because it is premised on there being a disparity between volume of sales potentially, as between a situation where the world rights went to A&U, compared with disposition of them separately by territories. It is submitted that is purely speculative that Ms Morton would have ended up in a position of financial advantage. In other words it is submitted that there is no evidence as to what the sales of books might have been had world rights not been granted to A&U but had they been granted separately by territory; so as to enable a conclusion as to whether there might have been a better position financially for Ms Morton in the latter event. The unproven assumption is said to be that the volume of sales would have been the same on the scenario that underpins the cross-claim. Senior Counsel for Ms Anthony submitted that one could not assume that publishers with deals on a territory by territory basis would have been able to have done as good a job for Ms Morton as A&U (see T 437).

113. [723]

     In that regard, it was submitted (see T 436.7-436.13) that:

114. [724]

     In other words, it was submitted that it could not be assumed that if the rights had been sold territory by territory the overall book sales would be the same as those sold by reason of the worldwide rights (see T 437).

115. [725]

     In my opinion it is difficult to see any reason for the level of book sales to have been materially impacted (in terms of giving rise to lesser royalties) had the publishing rights for Books 5 and 6 (or for that matter Books 3 and 4) been dealt with on a territory by territory basis rather than on a world rights deal. There is nothing, for example, to suggest that Pan Macmillan would have promoted the books differently (or achieved a different level of sales) had its publishing rights been licensed directly through Ms Anthony rather than as a sub-agent of A&U. I can understand an argument that there might have been different royalty arrangements had the world rights not been granted (although with Book 7 it appears those royalty arrangements were more advantageous to Ms Morton than not) but not that book sales (and royalty generated therefrom) would have been materially different.

116. [726]

     I have concluded that in all probability the level of royalties would have been of the same order on either basis, particularly given the high demand for Ms Morton’s books by the time of the 2010 publishing deals and hence that the loss suffered as a consequence of the breach of duty was the additional commission actually paid to A&U (as set out in the schedule referred to above).

117. [727]

     Finally, as to the claimed set-off, this does not arise in relation to the conclusions I have reached in relation to Ms Anthony’s claim. Had it arisen, I would have concluded that any amounts payable by Ms Morton should be set-off against the amounts payable by Ms Anthony to her on the basis that (as argued by Ms Morton) Ms Morton’s cross-claim satisfies the requirement for an equitable set-off (being one that is essentially bound up with, goes to the root of, challenges, calls into question, or impeaches the title of Ms Anthony in the requisite sense – her claim being for commission as agent and Ms Morton’s cross-claim alleging breach of fiduciary duty, breach of contract and negligence in the way that Ms Anthony performed her role as a literary agent for which that commission was payable) (see HP Mercantile Pty Limited v Dierickx [2013] NSWCA 479 at [136]; 97 ACSR 318).

118. [728]

     Insofar as the set off alternatively claimed under s 21 of the Civil Procedure Act is narrower, the argument for Ms Morton is that here the claim and cross-claim are for amounts that can readily be calculated as a matter of simple arithmetic and hence (were Ms Anthony’s claim to have succeeded) there are “mutual debts” which may be set-off against each other. It is noted that the calculation of Ms Anthony’s claim up to the date that the publishing agreements were terminated is in the amount of $211,770 (see Mr Mullins’ calculation in his report at p 6) and that the amount of the cross-claim has been calculated by taking the total figure for the “A&U share” for Books 3 to 6 ($1,913,136.312) (or, alternatively, the “A&U share” for Books 5 and 6, being $514,558.19).

119. [729]

     Thus it is submitted that even if Ms Anthony were to succeed in the claim for loss up to the date of the termination of the publishing agreements, no amount would be payable by Ms Morton. However, as already noted, the set-off issue does not arise in light of my conclusions on Ms Anthony’s claim.

Conclusion

1. [730]

   I will make orders consistent with the findings I have made above. I note that a declaration was sought in the cross-claim as to the valid termination of the contract of agency. I do not see the utility of such a declaration. It is apparent from my reasons that I consider that the agency agreement has been validly terminated as from the email communication to Ms Anthony on 11 December 2015 and by the conduct of Ms Morton at or around that time of appointing a new agent and directing her publishers accordingly.

2. [731]

   For the reasons set out above, I make the following orders:

   1. (1)

      Dismiss the plaintiff’s claim.

   2. (2)

      Enter judgment on the cross-claim for the cross-claimant against the first cross-defendant in the sum of $514,558.19 plus interest.

3. [732]

   Ms Morton sought an opportunity to address on the question of costs after judgment had been delivered. Accordingly, I will make no orders as to costs at this stage. I will simply reserve the question of costs and make directions for written submissions on that issue with a view, if appropriate, to determining the question of costs on the papers.