Council Officials

Manawatu Times, Volume 62, Issue 33, 9 February 1937, Page 8

Council Officials

Jury Awards £125 Damages AUSTRALIAN RIGHTS TOR GAS TIRE PATENT A claim for £IOOO against the assistant town clerk, James Patrick McDavitt, and James Wilfrid Muir, city electrical engineer, was heard in the Supreme Court at Palmerston North yesterday, for the second occasion before his Honour, Mr. Justice Johnston. The claim was made, by Arthur Andrew Hancock, salesman, of Palmerston North, formerly a City Council em plovee. Hancock claimed that defendants failed to comply with an agreement to transfer to him a share of the Commonwealth rights in a gas cabinet lire patent. The case was first heard in Octobei last before his Honour Mr. Justice Ostler, when a jury awarded £375 to plaintiff. However, an application on behalf of defendants asked that the jury’s verdict be set aside as being against the weight of evidence. Also joined as defendant in tho original hearing was Wilfrid Campbell Cnntlou. electrical inspector to the City Council. The jury’s verdict was also questioned on the ground that the alleged contract was made with defendants, but only with two of them. Delivering reserved judgment, Mr. Justice Ostler held that plaintiff had proved no partnership between the threo defendants; and that there was nothing from which a Court or jury could infer that Cantlbn was a party to the contract alleged. His Honour held that the matter could not be remedied by striking out Cantlon’s name from the judgment entered, and granted defendants’ motion for a new trial.

When the case was heard yesterday, the claim was identical except that notice of discontinuance of Cantlon as a defendant had been filed with the Court by plaintiff. The following jury was empanelled: Messrs R. W. Ramsay (foreman), G. W. Archibald, B. D. Alcock, R. B. Butcher, A. P. Stuart, E. A. Shackleton, D. G. Cornish, A. A. Coles, J. Ren wick, R. D. Hazeldon, W. Price and E. O. Pullyn. Mr. J. M. Gordon appeared for plaintiff and Mr. A. M. Ongley for defendants.

In his statement of claim plaintiff set out that in 1934 and until April 30, 1936, he acted as salesman for the Palmerston North City Council, of gas aud electrical appliances including gas cabinet fires. Muir was in charge of the department. As part of his duties Hancock devoted most of his efforts to the sale of the gas cabinet fires. Muir and Cantlon in 1933 invented a gas cabinet fire and applied for a patent for the invention in New Zealand. McDavitt, in 1933, entered into partnership with Muir and Cantlon to carry on the business of manufacturing and/or vending the gas cabinet fire. Hancock said that on May 1, 1934, one B. Goldingham acquired from defendants one-fourth share m the patent rights then granted or to be granted defendants, in respect of tho Commonwealth patent, for £25. Plaintiff alleged that on behalf of and at the request of defendants, he went to very considerable trouble to obtain a purchaser for the one-fourth share; that he brought about the sale of this to B. Goldingham, and in consideration of his services, defendants agreed with him that they should, iu lieu of a rnouey payment, assign to him 3-lGth of their rights in tho Commonwealth, rights if and when they were granted Defendants obtained a commonwealth! patent in 1935. Plaintiff said he had requested defendants to transfer to him 3-16th of the rights (the total value of which was £SOOO and upwards) but. they refused. The defence was a denial of tho allegations that defendants had agreed to assign to plaintiff three-sixteenths of the Australian rights of the patent.

Witnesses in the case were ordered out of Court, and his Honour directed that Cantlon, as he was no longer joined as a defendant and who was to give evidence for the defence, should remain out of hearing. Plaintiff gave evidence similar lo that at the previous trial. To Mr. Ongley, Hancock said he did now now allege that the three made a coutract with him, but only McDavitt and Muir. Previously, he had not made a specific claim against tho latter, two, but against the syivdicate, for transfer of the three-sixteenths share he claimed was due to him. McDavitt did the business for the syndicate. If the defendants had offered him brokerage and commission amounting to, say, 255, instead of the share, he would at tho time have accepted the offer, being hard pressed financially. Although McDavitt had boarded him free, ho was not destitute. It was correct that when, he came to Palmerston North from Auckland, ho owed £4O for board in that city. Mr. Ongley: Do you still consider these Australian rights are valuable? Hancock: Mr. McDavitt thinks they are worth £IO,OOO. 1 am positive they can be made extremely valuable. J di not know what the other members of tne syndicate are doing; whether they are developing the lielc* or whether they are trying to freeze the thing out because of pique. They never consult me as to what they are doing; they ignore me. Air. Ongley: Then if tho Australian rights prove worth £IO,OOO, you ask to receive nearly £2OOO for effecting a sale of a share at £2s?—That is the agreement made. Witness desciibed his relations with tue company which was formed to promote tho New Zealand sales of the patent. He himself, quite apart from the relations which were the subject of the present case, had an agreement giving him sole selling rights in tho Dominion. As far as ho knew, the New Zealand company's only resources had been £250, which be himself was instrumental in securing for them as payment for an eighth share. Operating

on “a fictitious value of £2000,” the New Zealand promotion had so far earned a profit of about £6OO, as far as he knew.

Air. Ongley: I have not objected up to now, but this is not evidence. It is pure hearsay.

His Honour: That Is so.

Air. Gordon: How do you calculate the value of the Australian rights at £10,000? Witness: The investment in the New Zealand shares is paying handsomely on a basis of £2OOO. New Zealand has a population of a million and a-half; on a pro rata basis development of the Australian rights should yield about five times as much.

Asked how sales of the patent had progressed in New Zealand, witness said that as a salesman for the City Council he sold about 80; since leaving the council to take up his agreement with the company he had sold (in the last twelve months) about 100. It might be nearer 200. The gas fires were also being sold in Palmerston North during this time. Non-Suit Asked Tor.

Mr. Ongley asked for a non-suit. In evidence, lie declared, Hancock had alleged that McDavitt failed to keep an agreement made on behalf of Muir, Cantlon and himself. But in his statement of claim, plaintiff alleged that Muir and McDavitt jointly had broken the contract, and there was no evidence to support that claim. Muir had never admitted liability for a half share in the syndicate to the exclusion of Cantlon; obviously plaintiff’s claim could not succeed on the present course ol action. Mr. Justice Ostler had ruled that the matter could not bo remedied by striking Cantlon’s name from the previous judgment, and yet Hancock again came to Court with an identical claim except that Cantlon was not cited as a defendant. His Honour said that as there was a X>rospect of the case going further, he thought the claim should go before the jury. If necessary the non-suit could be argued later. Patent Rights Expiring. In the afternoon evidence was given by McDavitt similar to his version ai the October hearing. He said the pa tent rights in Australia would expire on June 6, 1937, if manufacture had not commenced by that date. No offer hau been received to take up the manufac turing of the patent lire in Australia His Honour: Who owns the Austra lian rights at present? Mr. Ongley explained that Hancock had rebought from Goldingham for £33 the quarter share he originally had sold to Goldingham for £l’o. Of this quar ter share Hancock still owned all ex cept one twentieth, which he resold; McDavitt, Muir and Cantlon each owned a quarter share less one fortieth (of the total) which they had sold to the same man who bought an eighth share in the New Zealand rights. McDavitt admitted there was now a doubt as to the validity of the Australian patent rights. Prom information received in {September or October last they were now aware that there was a possibility of the patent being con tested by the protectors of a prior Aus tralian patent—one for a solid fuel invention but with the same principle of heat circulation. “No steps have been taken to commence manufacture in Australia,” said witness answering a further question. To Mr. Gordon: I have no recollection of conversations witu Hanc ;ek. Had I kept a private diary I would not have put down my conversations with Hancock; he w r as a friend of mine once. It was obvious from our action in permitting the sale of a share that we welcomed outside money in the Australian share of the venture. It is true wo would not have gone “touting” round the town for money. Mr. Gordon: Hancock had done several things for you personally, had he not?—Nothing out of his- pocket, Mr. Gordon. Not when you came back off a boat one time? Nothing at all out of his pocket.

Mr. Gordon: The New Zealand company is doing very well, is it not? - Witness: 1 do not propose to answer that question unless his Honour directs.

His Honour; What has that to do with the Australian rights? Air. Gordon said a knowledge of the New Zealand business would afford a good ground for estimating the value of the Australian rights. His Honour: But has there been any money received from Australia?

McDavitt said there had been no receipts at all from Australia.

His Honour: The New Zealand Company is doing well, is it not? Witness said tho patent fires were selling very well in New Zealand, although the company had operated for less than a year, and had not as yet paid a dividend. The other defendant, James William Muir, also gave evidence. To Mr. Gordon, he declared that in his opinion Hancock was adequately recompensed for procuring Goldingham ’a £25, aud for procuring the £250 for tho New Zealand concern, by receiving a ten years’ selling agreement, at a fixed rate per heater, from the New Zealand company. He never expected Hancock, who was no friend of his, to do something for nothing. The third patentee, Wilfrid Campbell Cantlon, also gave evidence. He confirmed the testimony of the two previous witnesses that remuneration of Hancock was in no way discussed until after completion of the sale to Goldingham. Even then the manner of recog nition was not determined. This concluded evidence. Both counsel addressed the jury. “The question you will have to determine,” said his Honour to the jury, “is whether, prior to the sale to Goldingham, Aluir and McDavitt promised lo Hancock a three-sixteenths share, if they did that and if they did it on behalf of the syndicate, ho is entitled to recover damages only for the expenses to which he was put in making the sale. But if they gave any such undertaking on their own behalf, and not on behalf of Cantlon, he is entitled to damages for deprivation of the shares. It seems however, that it would bo extremely difficult to prove such a contact. , “ Tha case is of great importance for

you, as there is a conflict of sworn testimony, and you must determine who is telling the truth,” declared his Honour, who pointed to the entire lack of corro boration for plaintiff's story. The jury retired at 7.50, returning after an hour and a half with a verdict for plaintiff for £125. Legal issues will be argued before his Honour this morning.