DAMAGES CASE.

Press, Volume LXVIII, Issue 20496, 15 March 1932, Page 6

DAMAGES CASE.

APPEAL AGAINST JUDGMENT. DECISION RESERVED. . (FRJtSa ASSOCIATION TSLIOEAM.) WELLINGTON', March 14.' The Court of Appeal was occupied today in hearing an appeal against the judgment ot Air Justice Blair in awarding damages against Samuel T. Silver, structural engineer, oi Wellington, in an action brought against him lor alleged deceit and breacti of duty by Alexander Stewart Mitchell, ot Wellington, architect. In July, 1930, proceedings were taken the .\ew Zealand Trawling and I'Tsh Supply Company, Ltd., against Mitchell, alleging that the latter, by providing in a specification of a building to be erected for the company the sum of £1164 for reinforcing steel, when the same could have been purchased for £682, had been guilty of negligence and a breach of duty arising out of his contract of employment as an architect. Mitchell confessed judgment for the sum of £526, inclusive of costs, and sued Silver for this sum and £250 general damages, on the grounds that ho employed Silver as an expert in steel construction work, and Silver, in recommending him to direct tho purchase of stool from a named supplier for £1164, had been guilty of deceit as well as a breach of duty. Judgment for £333 damages, being the sum of £526 claimed, less a reasonable fee for professional services, was given in favour of the plaintiff, Mitchell. The defendant, Silver, appealed from this judgment. Appellant's Case. In opening the case for appellant, counsel submitted that Silver had not acted dishonestly in directing the purchase of the steel reinforcing required from merchants who wore in fact only his agents. Respondent well knew that appellant would receive a profit on the sale of the steel, and shotiid have disclosed this fact to his principals. Respondent now complained that appellant's profit was excessive, and asked on that ground to be indemnified in respect of the claim by his own principals lor the amount of the profit. Presuming, however, that the Judge in the Court below had been right in holding that both parties had acted dishonestly, respondent's own breach of duty was the effective' cause of his loss, and ho could not succeed. Alternatively, it was contended that the contract was an illegal one, and neither party could recover. Counsel for the appellant contended that Silver was entitled to retain tho £330 profit made by him, as part of it consisted of legitimate trade gain and tho balance of expert's fee of £2OO, which was not unreasonable considering the risk of not getting paid at all. Submissions by Respondent. In opening the case for respondent, counsel submitted that the original contract by which Mitchell was to obtain the benefit of Silver's expert advice and services was not an illegal one, but that the method of obtaining payment by overloading the cost of steel, though illegal, was subsequent to the main contract of service and did not affect the relationship between the parties. He contended even if the whole of the contract between Silver and Mitchell should be considered an illegal one, Silver, by rendering Mitchell liable on an independent wrong of his own, was separately liable to hitn for "the amount of the extra profit Silver had illegally made on the transaction. Finally it was submitted that a fiduciary arrangement existed between the parties, and one piu-ty should .jLot be allowed to appropriate an extria profit to himself at the expense of the other. The Court reserved its decision.