Miller sues Warner Bros over Mad Max earnings

SYDNEY, AUSTRALIA - JULY 12: Actor Ansel Elgort, Dr George Miller and writer-director Edgar Wright at the Baby Driver red carpet at Event Cinemas on JULY 12, 2017 in Sydney, Australia.  (Photo by Christopher Pearce/Fairfax Media
SYDNEY, AUSTRALIA - JULY 12: Actor Ansel Elgort, Dr George Miller and writer-director Edgar Wright at the Baby Driver red carpet at Event Cinemas on JULY 12, 2017 in Sydney, Australia. (Photo by Christopher Pearce/Fairfax Media

More than two years after Mad Max: Fury Road became a worldwide hit - going on to win six Academy Awards - director George Miller is suing Hollywood studio Warner Bros over unpaid earnings.

Their falling out has been revealed in a Supreme Court of NSW ruling that the dispute between production company Kennedy Miller Mitchell and Warner Bros should be arbitrated here rather than in California.

The directors of the production company are Miller, whose stellar directing career includes two Happy Feet movies and the Mad Max series, and his longtime producing partner Doug Mitchell.

It's a dispute that seems to show why Miller is yet to make two more long-planned Mad Max movies.

He famously overcame more than a decade of setbacks to make the fourth movie in the action series, including three major delays, three actors down to play Max - Mel Gibson, Heath Ledger then Tom Hardy - then having to switch the gruelling shoot from Australia to Namibia.

But Fury Road was released to near unanimous critical acclaim and took $US378 million ($492 million) at the worldwide box office before triumphing at the Oscars.

Justice David Hammerschlag said the agreement to make Fury Road included a condition that Kennedy Miller Mitchell would receive a $US7 million bonus if "the final net cost" of the movie was not more than $US157 million, after certain costs were excluded from calculations.

And that if Warner Bros intended to seek another co-financier, it would first offer Kennedy Miller Mitchell the chance to provide finance.

The production company started court proceedings against the studio over unpaid earnings in September.

"On [Warner Bros'] calculations, Mad Max went over budget," Justice Hammerschlag said. "If these calculations are right, [Kennedy Miller Mitchell] does not get a bonus.

"[But the production company] claims [Warner Bros] made a series of decisions which caused substantial changes and delays to Mad Max, which led to additional costs and expenses and that [the studio] wrongly took them into account in its over-budget calculation.

"If those costs are left out of account [Kennedy Miller Mitchell] says that Mad Max came in under budget."

The production company also claimed Warner Bros entered into a co-financing agreement with RatPac Entertainment, then run by James Packer and Brett Ratner, for 12.5 per cent of the movie's funding - breaching the agreement to give Kennedy Miller Mitchell first offer.

The production company also brought a claim against Warner Bros for "misleading and deceptive conduct" for not informing it that additional costs due to the studio's changes and delays would be included in budget calculations.

While Warner Bros argued that NSW was "a clearly inappropriate forum" to arbitrate the dispute, Justice Hammerschlag disagreed.

Miller and Mitchell told Fairfax Media they were disappointed that "after all the hard work and success of the film, the studio failed to honour its obligations" to them.

"Simply put, we are owed substantial earnings for diligent and painstaking work which spanned over 10 years in development of the script and preparation and three years in production of the movie," they said. "That hard work resulted in a picture which found wide acclaim globally ...

"We would much prefer to be making movies with Warner Bros than litigating with them but, after trying for over a year, we were unable to reach a satisfactory resolution and have now had to resort to a law suit to sort things out."

Last month Miller put the historic art deco Metro theatre in Potts Point, his headquarters for more than 30 years, on the market with expectations of selling for $20 million.

Warner Bros responded with a short statement saying: "We disagree and will vigorously defend against these claims."

This story Miller sues Warner Bros over Mad Max earnings first appeared on The Sydney Morning Herald.