PURCHASE OF STEEL.

New Zealand Herald, Volume LXIX, Issue 21132, 15 March 1932, Page 12

PURCHASE OF STEEL.

CLAIM AGAINST ENGINEER. A JUDGMENT CHALLENGED. APPEAL COURT PROCEEDINGS. [BY TELEGRAPH. —PIVF.SS ASSOCIATION.] WFILLTTnCITON, Monday. Tile Court of Appeal to day heard an appeal from a judgment of Mr. Justico Blair, awarding damages against Samuel T. Silver, structural engineer, of Wellington, in an action brought against him for deceit and breach of duty by Alexander Stewart Mitchell, of Wellington, architect, in July, 1930." Proceedings were taken by the New Zealand Trawling and Fish Supply Company, Limited, against Mitchell, alleging that by providing, in the specifications of a building to bo erected for tho company, a sum of £1164 for reinforcing steel when this could have been purchased for £532, he. had been guilty of negligence and oi breach of duty arising out of his contract of employment as architect. Mitchell confessed to judgment for the sum of £526, inclusive of costs, and sued Silver for this sum and £250 general damages, on grounds that ho employed Silver a s an expert in steel construction work and Silver, in recommending him to direct the purchase of steel, from names supplied, for £1164, had been guilty of deceit, as well as of breach of duty. Judgment for £323 damages, being the sum of £526 claimed, less a reasonable fee for professional services, was given in favour of the plaintiff Mitchell. Defendant now appealed from this judgment. Casa for the Appellant. In opening the case for the appellant counsel submitted that the appellant Silver had not acted dishonestly in directing the purchase of the steel reinforcing required from merchants who were, in fact, only his agents. The respondent well knew that tho appellant would receive a profit on the sale of the steel and should havo disclosed this fact to his principals. Tho respondent now complained that the appellant's profit was excessive and asked on that ground to bo indemnified in respect of the claim by his own principals for tho amount of the profit. Presuming, however, that the Judge in the Court below had been right in holding that both parties had acted dishonestly, submitted counsel, the respondent's own breach of duty was the effective cause of,his loss and he could not succeed. Alternatively, it, was contended that the contract was an illegal one and neither party could recover. Continuing, counsel for the appellant contended that Silver \vn s entitled to retain the £330 profit made by him as part of it consisted of a legitimate trade gain and the balance of an expert s fee of £2OO, which was not unreasonable considering the risk of not getting paid at all. Contentions by Respondent. Counsel for the respondent Mitchell 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 tho method of obtaining payment by overloading the cost of the steel, though illegal, was subsequent to the main contract, of service and did not affect the relationship between the parties. He contended that 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 him for the amount of extra profit Silver had illegally made on the transaction.

Finally, it. was submitted that a fiduciary arrangement existed between the parties and 0110 party should not be allowed to appropriate an extra profit to himself at tho expense of the other. The Courfc reserved it s decision.