Toronto — The heirs of Anne of Green Gables author Lucy Maud Montgomery staged a 1999 news conference aimed at forcing Sullivan Entertainment to settle a financial dispute, a Toronto court heard on Tuesday.
"The object of this exercise was to threaten a press conference to extract more money from Sullivan, not to — in fact — conduct a press conference," said Sullivan lawyer Tony Kelly in his opening statement in the Ontario Superior Court of Justice.
"What better time to implement this strategy than when Sullivan is going public with its IPO and will be concerned that the threatened press conference would be fatal to the IPO."
Sullivan Entertainment, which has produced several TV films and series based on Montgomery's beloved characters, brought the defamation suit four years ago against three of Montgomery's heirs, their lawyer and the public relations firm that organized the news conference.
Megan Follows starred as Anne Shirley in the television series Anne of Green Gables (Handout)
The suit relates to allegations made at the event by Ruth MacDonald, Montgomery's 88-year-old daughter-in-law, and her daughter, who said they were owed substantial royalties which Sullivan was refusing to pay or even acknowledge.
Sullivan says those statements — and ones contained in a media release from the family — tarnished the company's reputation, causing the initial public offering of its shares to fail.
Although lawyers for the defendants withheld their opening remarks, a statement of defence filed with the court states that "the words complained of in the media advisory are not defamatory of the plaintiff."
The family also denies allegations that the news conference was conceived to embarrass Sullivan into paying them more money.
"The strategy was to let the plaintiff know that the MacDonald defendants were prepared to share their side of the story with the media unless the plaintiff showed it was prepared to negotiate in good faith," the statement of defence reads.
Both parties agree that the Montgomery heirs received $425,000 from Sullivan in 1984 for the first Anne of Green Gables movie and $100,000 for its sequel.
But the family says it's entitled to a share of the profits from both productions and it has received none. The statement of defence alleges that Sullivan told them "it made no profits" from the two movies.
"After almost nine years of requesting their share of the profits from Anne I and Anne II and being told by Sullivan Inc. that there were none, the MacDonald defendants were stunned to see the vast success of the Anne films being proclaimed in the prospectus" of the IPO, the statement reads.
The family also alleges that Sullivan Entertainment originally refused an audit of the financial information related to the two productions, then provided an accounting document that was "vague and inadequate."
Kelly told the court Tuesday that the possibility of binding arbitration to settle the dispute had been raised prior to the 1999 news conference, but that the family feared they'd lose "reversionary rights" to Montgomery's works.
"If an arbitrator found that they have no reversionary rights, the MacDonalds have lost their meal ticket," Kelly said.
In 1908, Montgomery published Anne of Green Gables, the story of a plucky red-haired orphan girl who eventually wins the hearts of her adoptive parents in rural Prince Edward Island.
It's estimated that sales of the author's books stand at more than 50-million copies internationally.
The trial continues.
