Mechanical & General Inventions Co v Austin

VISCOUNT SANKEY L.C. My Lords, this is an
appeal and cross-appeal from an order of His Majesty's
Court of Appeal (England) dated March 27, 1934, varying
the judgment of Hawke J. dated November 15, 1933, after
a hearing by him and a special jury.

The appellants, who were the plaintiffs in the Court of
first instance, are Dr. Edouard Ernest Lehwess, a French
subject resident in Paris, and a British company, Mechanical
and General Inventions Company, Ld., of which he is a
director. The respondents, who were defendants in the
Court of first instance, are Sir Herbert Austin and the Austin
Motor Company, Ld., Sir Herbert being the chairman of
directors of that company. A firm of Stephen Watkins, Son
& Groves, who are chartered patent agents and who acted
for Sir Herbert and the Austin Company, were also defendants
in the Court of first instance. The action was for damages
for breach of contract and conspiracy. Substantially, the
appellants relied upon two alleged agreements.

The questions raised by this appeal are :—

(a) Whether the Court of Appeal was right in law in setting
aside a finding by the jury that there was an agreement
between the appellants and the respondents, the Austin Motor
Company, Ld., giving the respondent Company an option for a
licence under letters patent then being applied for by the
appellants, upon the ground that no jury properly directed
could reasonably find that there was any such agreement ; and

(r) (1889) 14 P. D. 64, 68.

352 HOUSE OF LORDS [1935]

H.L.(E.) _(b) Whether the Court of Appeal was right in law in holding
1935 | that upon the evidence only nominal damages could result
Mecnanrcat from the breach by the respondent of another agreement by
Cuasea, Which certain information, to be communicated by the
ao appellants to the respondents, relating to the said application,
anp __ should be used confidentially, that is, only for certain specified
LSHWESS purposes, and in setting aside a finding of the jury that the
Austin damages resulting from the breach of that agreement were

Fader 35,0001., and substituting therefor a finding of nominal
Motor CO. damages—namely, 40s.
saieet'c, The appellants were patentees of a system of fitments for
motor-car bodies of the "sunshine roof" type, having upon
May 22, 1928, applied for provisional protection in this
country in respect of certain features thereof under number
14956/28. The said system was known as "the Solcar
System." In July, 1928, the appellant Mr. Lehwess approached
the respondent Sir Herbert Austin giving him certain
particulars (including a mémoire descriptif and a sheet of
drawings) relating to the Solcar System, with a view to
interesting him in its development in this country in con-
nection with Austin motor-cars. The appellants, on August 2,
1928, filed at the Patent Office a cognate provisional speci-
fication under number 22412/28 and a complete specification
with claims covering both provisional specifications. Later
in the same day Mr. Lehwess at the invitation of Sir Herbert
Austin visited the works of the respondent Company at
Longbridge, Birmingham. The Solcar System was outlined
by Mr. Lehwess to Sir Herbert Austin, and the appellants
contended that as a result thereof it was agreed that certain
information should be disclosed by the appellants to the
respondents, and in particular the patent documents and
drawings which had been filed at the Patent Office, upon
the terms that the information and documents were to be
used confidentially only, and were not to be disclosed to others
except for the purpose of deciding whether the respondents
desired to become licensees of the patent. This alleged agree-
ment has been conveniently called the '"' confidence agreement."
With regard to the second alleged agreement, Mr. Lehwess

AeC; AND PRIVY COUNCIL. 353

and Sir Herbert Austin met on September 3, 1928, and had H. L. (E,)
before them a letter of August 31. One of the main issues 1935

at the trial was whether at this meeting a concluded oral Mxcuanrtcat
agreement was reached between the parties. The appellants ¢.\°>.,

contended that a binding agreement was reached upon the sai aaa
terms set out in the said letter subject to certain alterations np

as to the time and manner of the giving of notice by the '™™*S

respondent Company of their intentions with respect to the AUSTIN

exercise of the options given. This agreement has been pee
conveniently called the "' licence agreement." Moree

The conspiracy alleged was a combination between all ,/Rcout.
three of the defendants to commit the alleged breach of the
confidence agreement. The defendants relied primarily upon
a denial that either agreement had ever been made or that
there had been any conspiracy.

The action was tried before Hawke J. and a special jury
in the King's Bench Division. The trial began on October 18,
1933, and lasted 144 days. The jury found that both agree-
ments had been made and broken and that the conspiracy
alleged had been entered into by Sir Herbert and the Austin
Company but not by the firm of Watkins. They awarded
63,5507. as damages for breach of the licence agreement and
35,0007. as damages for breach of the confidence agreement
and for conspiracy.

The claims under the two agreements were alternative in
the sense that the appellants, as they conceded, could not
have suffered any damage under the breach of the confidence
agreement if the licence agreement were implemented. The
learned judge directed judgment to be entered for the
appellants against the Austin Company for 63,550l. with costs,
and against Sir Herbert Austin and the Austin Company for
35,0001. with costs, with the proviso that any sum recovered
by the plaintiffs under either of the judgments should be
taken to be in satisfaction pro tanto of the liability under
the other judgment. There was no evidence that the Austin
Company had acted in the matter through any agent other
than Sir Herbert himself; but the judge allowed the finding
of a conspiracy between the two to stand.

HOUSE OF LORDS [1935]

The defendant firm of Watkins was successful in the only
issue in which it was involved—that of conspiracy—and

Ribeekarekt judgment was entered for it with costs against the plaintiffs,

but the judge ordered that the plaintiffs should recover such
costs against the two unsuccessful defendants.

The unsuccessful defendants appealed and the appeal was
heard before the Court of Appeal (Lord Hanworth M.R. and
Slesser and Romer L.JJ.) on and after February 12, 1934,
the arguments occupying 104 days. Judgment was delivered
on March 27, 1934, and was unanimous. The Court set aside
the judgment on the licence agreement on the ground that
no jury could reasonably have found that such an agreement
had been made. The Court refused to disturb the finding of
the jury that the confidence agreement had been made and
broken, but they found that no substantial damage had been
suffered by reason of the breach and reduced the amount of
the judgment to gos. The whole costs of the appeal were
awarded to the appellants, and the Court ordered that there
should be no costs, on either side, of the proceedings in the
Court of first instance.

The issues were simple—namely, whether the two agreements
were made, and if so, were they broken, and what were the
damages ? Unfortunately, however, the facts were of a
somewhat complicated character, as may be gathered when
one considers that the case for the appellants occupied
Ig pages of print and contained 17 reasons why the Court
of Appeal was wrong and the case for the respondents occupied
no less than 77 pages of print and contained 13 reasons why
the Court of Appeal was wrong on certain issues. The
transcript of the proceedings before the learned judge occupies
nearly 1000 closely printed pages.

I will now state the facts as briefly as possible, taking first
the licence agreement. Whether there was such an agreement
depends primarily upon the interview which took place
between Mr. Lehwess and Sir Herbert Austin on September 3,
1928, and upon this the jury saw and heard both these
gentlemen. It is enough to say that they accepted the
evidence of Mr. Lehwess and did not believe the evidence of

A. C. AND PRIVY COUNCIL. G0

Sir Herbert Austin—a fact which is not surprising having H. L. (E.)
regard to the admissions of Sir Herbert Austin made in the 1035
course of his cross-examination. No doubt if the only Mxcuanicar
material before the jury had been the evidence of these two 6.0%.
gentlemen, it would have been open to counsel for Sir Herbert INVvENTIons
Austin to argue that his evidence should be accepted and to ee
suggest improbabilities in the evidence of Mr. Lehwess, and a.
on that it would have been difficult to impeach a verdict for AustIN

the plaintiff. The matter, however, does not entirely depend cee
upon what took place at this interview. There is a very ek ak
large amount of correspondence which has to be taken into .VKcout.
account and carefully weighed and considered. Especially ee
are there a number of letters in July and August of 1929
written by Mr. Lehwess which throw very great doubt upon
his story. It may well be that at the time of the interview
he thought that he had got an agreement with Sir Herbert
Austin, but the letters point to quite an opposite conclusion.
For example, a letter of July 20 from one company to the
other, where Mr. Lehwess's Company say "' we should like to
know whether you are willing to adopt our Solcar Hood
licence or not. Our Mr. Lehwess, who has been conducting
these negotiations personally with Sir Herbert Austin is most
anxious that we should come to some final arrangement with
your firm before we offer our system elsewhere.'' Again on
July 27 Mr. Lehwess's Company write: "' We should be glad
if you will give us an appointment at the latest towards the
middle of next month to try and settle on a definite agreement
in this matter.'' Sir Herbert Austin writeson July 30: "Iam
still awaiting the copies of the patent specifications which
you promised to send to me showing what rights you could
give us a licence for to manufacture this type of body."'
And Mr. Lehwess writes on August 1 to Sir Herbert Austin :
"I sincerely trust that round about August 15 you will be
able to see me at Northfields or in London, so as to settle
something regarding the manufacture of the Solcar."
Now these letters upon their face were really fatal to the
contention that there was any such agreement as Mr. Lehwess
no doubt thought he had concluded upon September 3 in

356 HOUSE OF LORDS [1985]

H. L. (E.) the previous year. Both gentlemen were examined and cross-
1935 | examined upon these letters and no satisfactory explanation
Mxzcuanicat was given by Mr. Lehwess of letters which showed almost to
Guawear demonstration that the agreement that he thought he had
PORE ONS concluded had not really been arrived at. It is true that
AND the jury found that such an agreement had been made and
LeHWESS T should be very loath to set aside any verdict of a jury
Austin arrived at after they had seen the witnesses and heard them.

'austin I cannot help thinking, however, that in the present case,
Renee! after a prolonged trial and thousands of questions in
sake Lc, €Xamination and cross-examination, it was impossible for the
jury to have kept all the facts in their minds. Both in the
Court of Appeal and in your Lordships' House we have had
the advantage of a transcript of the shorthand note, a copy
of all the letters and a book containing all the documents.
By one counsel or another we have been repeatedly referred
to letters and to passages in the evidence which we had in
front of us in order that we should see them and weigh them.
If the jury had had the same advantages as we have had,
in this long and complicated case, of having such a transcript
of the evidence before them and the whole of the corre-
spondence under their eyes, they could not have arrived at
the conclusion that the licence agreement was made. I agree
with the Master of the Rolls who says that no jury properly
directed' could reasonably find that there was any such
agreement and the verdict on this point must be set aside.
In reaching this result I must not be thought to impugn the
ability of the jury to come to a proper verdict, but rather
to stress the difficulty of their task. The appeal, in so far
as it concerns the licence agreement, must be dismissed.
With regard to the confidence agreement, the appellants
are in this position that they have in their favour a verdict
of the jury for 35,00o0/., though the judgment of the Court of
Appeal is for nominal damages of 4os. only. It is unnecessary
to lengthen this judgment by reciting all the facts and the
considerations for or against the verdict. The real point at
issue is whether there was evidence on which a jury properly
directed could come to the conclusion that the confidence

A. C. AND PRIVY COUNCIL. 357

agreement had been made and broken. There are no such H. L. (E.)
letters as there were in the case of the licence agreement to 1935
throw any doubt upon this and there were abundant facts Mecwantcar
upon which a jury were entitled to come to the conclusion (Anh)
they did. I can see no misdirection by the learned judge INvENtions
and I again find myself in agreement with the learned ea
Master of the Rolls where he says "' there is evidence given oi wes
by Mr. Lehwess that the documents were sent to the defendant <Avstin
Austin on the basis of an agreement that they should be Fea
treated as confidential and only used for the purpose of M070 ©°
considering whether a licence to use the patent should be ,vcout,
taken or not."" The one difficulty is the question of damages.
Were the Court of Appeal right in setting aside the verdict
of the jury, 35,000/., and awarding only nominal damages
of 4os.? Undoubtedly 35,o00/. is a very large amount, but
it must be remembered that this was essentially a case for
the jury to assess damages. If there was an agreement and
if there had been a breach of it, it is very difficult to say
that the jury were wrong. To begin with, it is impossible
to say it was a case for nominal damages only. What are
the facts? It must be remembered that the jury were
entitled to take into consideration that one of the things
that might have happened was that the Austin Company, a
great and prosperous concern, might have taken and pushed
che invention. The hood was the sort of hood which might
have got a good market. It was a good proposition and it
was actually put on the road and advertised by the Austin
Company. There was evidence as to the number of cars
upon which a rival roof was placed and the profits derived
therefrom. Over and above that, when the time arrived at
which Mr. Lehwess's patent would have been dealt with not
only was there a slump throughout the country, but a rival
patent had got in first. It was said that Mr. Lehwess really
waited because he thought he had a licence agreement, which
turned out not to be a fact, and that therefore he is to a very
great extent the author of his own wrong or misfortune, and
it was due to his dilatoriness that the patent was not a success.
But the learned judge told the jury that they must take

'ARC. -1935. 3 2B

358 HOUSE OF LORDS [1935]

H. L. (E.) this matter into account. He says: "To a certain extent, of
1935 | course, your damages will have to be estimated. I can see
Nese ecu that >but they must be as near the actual truth as you can
AND get from the evidence and, of course, I say that at this

GENERAL

Bae neNs moment—I shall have to return to it—but I say that at
hep this moment because of the minorization or lessening of the
LeHnWESs damages from his lack of diligence, it must be very difficult."

o. The judge later on says: '' Well, on whatever date you think
Austin it would have been reasonable for him to say ' Well, I am
MoToR CO. dealing with a lot of people who do not intend to carry out
sankey Lc, their bargain and do not intend to do anything, and I must
do what I can'; when you have decided in your own mind
what would be a reasonable date for him to take up that
attitude, you have then got the even more difficult question ;
that is to say, what do you think he could have made, with
reasonable diligence, after that date ? "

It was pointed out to the jury that if Sir Herbert Austin
had turned the invention down in November, instead of, as
it was put in the Court of Appeal, "' keeping Mr. Lehwess on
a string," the plaintiffs might have been able to interest
some other big motor company in their invention and to get
them to take it. In other words, the plaintiffs were delayed
in their exploitation by the conduct of the defendant Company.
All these were matters for the jury and, although undoubtedly
the sum is a large one, in my view this is not a case for sending
the matter down for a new trial for the assessment of damages
only. The jury were the proper constitutional tribunal to
assess the damages and it is impossible to say they have
gone so wrong that their assessment must be set aside. It is
not a case merely for nominal, but for substantial damages
of which the jury were the judges.

In the result, the judgment of the Court of Appeal should
be varied, the appeal should be allowed and the appellant
Company should have judgment for the sum of 35,0001.
I should very much hope that, to save the expense of a
protracted and long discussion, the parties might agree
amongst themselves as to the costs. If they do not, I am
for making the following order. The plaintiffs should have

A. C. AND PRIVY COUNCIL. 359

the costs of the action except in so far as they have been H. L. (E,)
increased by the claim under the licence agreement, which 1935
costs should be awarded to the defendants. The defendants Mzcuantcat
should have the costs of the appeal to the Court of Appeal, ¢,AX>.
except in so far as they were increased by their appeal against ghia
the 35,000/. verdict on the confidence case, which costs should —anp

be awarded to the plaintiffs ; and in this House the plaintiffs scicsoh a?
should have the costs except in so far as they have been AUSTIN

increased by the appeal against the licence agreement, which oe
costs should be awarded to the defendants. Maree?

I cannot part from this case without referring to the .vpovrt.
remarks made in the Court of Appeal upon the method in
which it was conducted in the Court of first instance. The
learned Master of the Rolls said: '"' There remains one feature
of this case upon which, in association with my colleagues,
I desire to make serious comment—that is the cross-
examination to which the leading actors on either side,
Mr. Lehwess and Sir Herbert Austin, were subjected. Measured
by the shorthand note, it appears that Mr. Lehwess's
examination occupied 80 pages; his cross-examination
occupied 265. The examination of Sir Herbert Austin occupied
39 pages, and his cross-examination 148 pages. There is a
tedious iteration in some of the questions asked, and prolonged
emphasis is laid on some matters, trivial in relation to the
main issues. Cross-examination is a powerful and valuable
weapon for the purpose of testing the veracity of a witness
and the accuracy and completeness of his story. It is entrusted
to the hands of counsel in the confidence that it will be used
with discretion ; and with due regard to the assistance to be
rendered by it to the Court, not forgetting at the same time
the burden that is imposed upon the witness. We desire to
say that in our opinion the cross-examination in the present
case did not conform to the above conditions, and at times
it failed to display that measure of courtesy to the witness
which is by no means inconsistent with a skilful, yet powerful,
cross-examination."'

With that censure I agree, except that I cannot think it
can be justly applied to the counsel who appeared on behalf

3 2B2

HOUSE OF LORDS [1985]

H. L. (E.) of the plaintiffs or to any of the counsel who appeared at

the bar of your Lordships' House. It is right to make due
allowance for the irritation caused by the strain and stress
of a long and complicated case, but a protracted and irrelevant
cross-examination not only adds to the cost of litigation,
but is a waste of public time. Such a cross-examination
becomes indefensible when it is conducted, as it was in this
case, without restraint and without the courtesy and con-
sideration which a witness is entitled to expect in a Court of
law. It is not sufficient for the due administration of justice
to have a learned, patient and impartial judge. Equally with
him, the solicitors who prepare the case and the counsel who
present it to the Court are taking part in the great task of
doing justice between man and man.

LorD BLANESBURGH. My Lords, except only upon one
question, I find myself in full accord with my noble and
learned friend on the Woolsack in everything he has said.
I have been privileged to read his judgment in print. Subject
to that one reservation I would, if I may, without another
word in support of them, associate myself with all its con-
clusions. As a result of these very little of the jury's original
verdict remains in being. Their significant finding on the
conspiracy issue against the respondents alone, to the exclusion
of Mr. Watkins and his firm, did not survive the Court of
Appeal. It was not revived in this House. Their findings
on the licence agreement are now finally set aside. Their
assessment of damages at the sum of 63,550/. for breach of
that agreement shares, of course, the fate of the agreement
itself. It may remain significant for illustrative purposes.
But that is all. The verdict upon the confidence agreement
stands. That my noble and learned friend leaves intact.
It is there my difficulty arises. I regret that I cannot go
so far. As in duty bound and with no reluctance I accept
the finding that there was such an agreement and that it was
broken by the respondents to the extent found by the jury.
There was evidence to justify them in so finding. But tHeir
assessment of damages for that breach at 35,000/. is, in my

A. C. AND PRIVY COUNCIL. 361

considered judgment, an assessment incapable of justification. H. L. (£).
It can, I believe, be shown affirmatively, and what follows 1935

is an attempt on my part to show, that, applying the mscuantcat
language of Fitzgerald J., approved by Palles C.B., in g AX?)
M'Grath v. Bourne (i), no reasonable proportion exists between ES
the assessment and the circumstances of the case. If that np
be so (it may be a large "if," I agree, but if it be so), then ine
especially, in a case like this where the damages assessed are AUSTIN

AND THE
for breach of contract and not in tort, it will hardly, I take Austin
it, be gainsaid that in a Court of review, such an assessment Mor
will not be allowed to stand. Baden ets

My Lords, the verdict of the jury in question now was not
a verdict at large. This assessment of damages was based
upon their own answers to specific questions submitted to
them. Its real meaning can only, I think, be fully appreciated
if the range of these questions with the answers be kept
clearly in view. The questions on this, as on all other issues,
were agreed by counsel on both sides and accepted by the
learned judge as the only questions upon which the jury's
assistance was required. It would overburden a judgment
like this again to set forth at length those now relevant.
It will suffice to describe, as the result of both question and
answer, the situation with reference to which in relation to
the confidence agreement the jury were required to assess
damages.

(a) There was nothing to be taken as confidential shaken
the appellants and the respondents except in relation to
the " plaintiffs' specification and drawings," i.e., their draft
complete specification and drawings deposited at the Patent
Office on August 2, 1928, and accepted with slight modification
on November 22, 1929.

(6) The breach of confidence complained of and found
consisted exclusively in the taking out by Sir Herbert Austin
of the Letters Patent No. 320,486, applied for on September 8,
1928, and accepted on October 12, 1929.

(c) It was in respect of that breach and that breach only
that the assessment of damages was called for.

_» (1) (1876) I. R. 10 C. L. 160, 164.

ce

362 HOUSE OF LORDS [1985]

H. L. (E.) And there was something more. There were two heads,
1935 and two only, under which the appellants were alleged to
Mecuanrcar have been damaged by the respondents' breach: (a) they
Gunenar were thereby delayed in the exploitation of their construction :
eae and (b) they were thereby prevented from entering into a
AND formal licence agreement with the respondent Company.
ao SS This second allegation in the amended statement of claim was,
AusTIN except for the addition of the word " formal,'"' a survival

Scernt of one in the original statement of claim in which the existence
Motor Co. Of a licence agreement was not alleged, and Romer L.J.,
Blarctorgh, 1 see, so construes the amended pleading as to exclude this
—— second allegation from consideration in relation to the con-
fidence agreement. But although its original application
was to something quite different, the allegation appears to
have been treated at the trial as applicable to a breach of

the confidence agreement. And I will so regard it.

The question therefore is whether an award of 35,000/. as
damages under heads (a) and (0) for the only breach as alleged
and found of the only confidence reposed in the respondents'
also as found, can be justified ? Does any reasonable propor-
tion exist between that assessment and the circumstances of
the case—to repeat the Irish judicial test ?

There are two "circumstances of the case'' which are
important to be remembered now. The breach of confidence
was in respect only of the terms of the appellants' British
patent, which until that patent was accepted on November 22,
1929, had not been published to the world. The licence
agreement was to be for an exclusive licence of that patent
for its full term under minimum royalties but with no covenant
on the part of the licensees either to work or develop the
invention. The value to the appellants of such an agreement
under which the whole beneficial interest in the patent would
have passed to the respondents was hailed by Dr. Lehwess
himself in his letter to Mr. Jameau of September 3, 1928, as
being 75,000/.—the amount of the minimum royalties extending
over the whole sixteen years of the patent. The value of
these royalties at the date of the writ was at the trial agreed
at 39,900/. That is one circumstance. The second is that on

A. C. AND PRIVY COUNCIL. 363

» June 10, 1930, the appellants pressed upon the respondents H. L. (E.)
for their acceptance a proposal to sell their whole patent 1935
rights for Iooo/. a year over sixteen years, payments, that is Mxcuanrcat
to say, with a present value of probably not more than 11,0001. ¢,0™" .,
With these two circumstances remembered, each of the jury's wi a
assessments of damages asks for criticism—the first assessment, anv

of course, being only now relevant as throwing some light on ws i
the second. But the facts are that while the whole present AUSTIN

value to the appellants of the licence agreement on the terms "eben
that the whole beneficial interest in the patent rights had ee es
passed to the respondents was 39,900/., the jury awarded to Bien
the appellants 63,550/. as damages for repudiation by the ~~
respondents of that contract, and on the footing that all the
patent rights remained with the appellants; while they
awarded to the appellants in respect of the breach of the
confidence agreement the sum already stated of 35,000/.—
which either by accident or design is seven-eighths of the
value at the date of the writ of the minimum royalties payable
under the licence agreement, i.e., 34,975/., with 25/. added to
make a round figure, and again on the terms that the patent
rights remain with the appellants—the assessment being
24,0001. above the price asked by the appellants in June,
1930, for their entire interest in the patent.
But it is not necessary to rely upon such general considera-
tions, significant of this jury's temper as they seem to be.
It is safer to consider this present assessment in detail.
It is one that can be tested.
And it is convenient to deal first with the second allegation
already stated—namely, that as a result of the respondents'
breach the appellants were delayed in the exploitation of their
construction and were prevented from entering into a formal
licence agreement with the respondent company. It is
hardly, I think, open to doubt that the sum of 35,000/. at
which the jury quantified the appellants' damages in respect
of the confidence agreement resulted from their acceptance
of the view that, owing to the taking out of the Austin letters
patent, the appellants lost the chance they would otherwise
have had of an acceptance by the respondent Company of a

364 HOUSE OF LORDS [1935]

H. L. (E.) licence in the terms specified in the licence agreement. That
1935 35,000/., as the sum quantified, can be so explained, and is not
MxcuanicaL a Mere coincidence, is a conclusion I could elaborate if it were

Grnenar necessary. But it is really unimportant whether the explan-
SBA TIONS ation already offered of the jury's figure is more than a guess.
oO.

and ___ The real question is whether an award of damages on this head

LEHWESS for any sum at all can be justified.
poss. Owing possibly to some error in the shorthand note the
AND TH

Austin learned judge's direction to the jury here is not quite clear.
POTO COS The passage is as follows at p. 233: "' Sir Stafford [Cripps]
Blancturgn, tabulated his claims and one of the things he suggested was

—— loss of a contract with Sir Herbert Austin. Well on this part
of the case—I am not now talking about the licence at all—
there is not any agreement by Sir Herbert to make a contract
with the plaintiffs and Mr. Pritt is quite right in saying that
you must not take that into consideration. Of course, if the
plaintiffs had had a chance and assuming that they have lost
that chance because in breach of contract the defendants have
taken it from them, why then it may be that if that chance
had not been taken away the public demand for these cars
might have become so great ; it may be that Sir Herbert or
his company would have been driven to using them. You
must take that into consideration."

Now, here the learned judge does seem to direct the jury that
loss resulting from Sir Herbert Austin's refusal to enter into an
agreement with the appellants must not be considered, but if
his further observations amounted to a direction to them to
take this so-called " chance' into consideration it was, I sug-
gest to your Lordships, a serious misdirection. For it is, I
submit, clear that the taking out by Sir Herbert of his patent
could in reason have had no connection with or influence upon
the question whether or not the respondents should take a
licence from the appellants. It is not only that there is no
evidence, so far as I can find, that the existence of his own
patent influenced Sir Herbert Austin at all in his decision
that his Company should not take a licence. His own evidence
was that he abandoned the whole idea of the appellants'
construction. because in his. view it was not wanted in the

A. C. AND PRIVY COUNCIL.

market and was in itself unsatisfactory. But apart from all
evidence does it not stand to reason that the taking out of this

365

H. L. (E.)
1935

patent of his own could have had no influence upon his decision ? Kees AL

He did not by taking out a patent subsequent in date to the

AND
GENERAL

appellants' annex the appellants' construction or any part of it pera ae:
le)

or strengthen his or his Company's position as against the
appellants in any way. His patent in this respect, even if it
made claims included in the appellants' specification, gave him
as against them no rights which he did not possess without
one. His taking out of his patent made a licence from the
appellants neither more nor less desirable for the respondent
Company from a business point of view than it had been
before. Apart from the extravagance of such a sum as
35,000. being the measure of damages on this head—a subject
to which I have already alluded—I suggest to your Lordships
that an award of any damages at all on this score is quite
inadmissible. In this result I find myself in agreement with
the Master of the Rolls. Nor can I find any answer to
Romer L.J. when he says: '' Neither the defendant Austin nor
the defendant Company can be made liable to the plaintiffs
in damages because the Company refused to enter into a licence
agreement with the plaintiffs, whatever may have been the
reason for that refusal."'

But, my Lords, although this claim of the appellants may
well have been the real basis of the jury's assessment, little was
made of it in this House. Here the assessment was mainly
sought to be justified on the first head pleaded—that of delay.
The registration of the Austin patent on the file of the Patent
Office, it was said, was a complete bar, while it continued, to
the exploitation of the appellants' construction, and by the
time that patent was removed every possibility of marketing
the appellants' monopoly had disappeared. An award of
35,0001. on that head could be justified : for, as a result of the
appellants' delay in exploitation, due to the registration of
Sir Herbert's patent, the appellants' patent had become
worthless. It will be seen that this claim is alternative to
the first. The two claims are not concurrent.

Now, my Lords, there are many answers to these contentions,

AND
LEHWESS
v.
AUSTIN
AND THE
AUSTIN
Moror Co.

Lord
Blanesburgh.

366

H. L. (E)
1935
—)

MECHANICAL
AND
GENERAL
INVENTIONS
Co.
AND
LEHWESS
v.
AUSTIN
AND THE
AUSTIN
Motor Co.

Lord
Blanesburgh.

HOUSE OF LORDS [1985]

if in truth they were ever even considered by the jury, which
I gravely doubt.

First of all the assertion that his patent was, even at the time
of the trial, worthless was one that Dr. Lehwess would not have
permitted himself to make. But the final answer is that if it
had become worthless and if its worthlessness was due to delay
in exploitation, that delay was in no way attributable to the
registration of the Austin patent or to any interference with the
appellants' activities by reason of its existence. On Decem-
ber I0, 1929, so soon as Mr. Watkins heard of the acceptance
of the appellants' patent he intimated Sir Herbert's intention
to withdraw all competing claims from his patent accepted a
month or so earlier. On January 10, 1931, Sir Herbert con-
sented to a revocation of his patent: but this consent was not
accepted by the appellants, as they claimed to have the patent
registered in their name, a claim which failed, but which
delayed the formal revocation of the patent until July, 1931.
It is difficult to suppose in these circumstances that the appel-
lants were ever delayed in the exploitation of their patent by
the presence on the register of the respondent's patent, one
subsequent in date, and with all competing claims withdrawn.
Some reason for their failure to exploit their system which,
to the great surprise of the learned judge, Dr. Lehwess stated
continued up to the trial in November, 1933, must be looked
for, and I suggest to your Lordships that, if it did not result
from doubts as to its monopoly value, it was due to the fact
that the appellants, so soon as they realized that the respondents
had abandoned the projected licence agreement, set themselves
by negotiations to induce them to enter into a fresh agreement,
even to purchase their patent outright. They always ex-
pected, said Mr. Negon, to come to such an arrangement.
But to be able to do so it was essential that they should retain
their patent rights intact so that they might be included
either in a sale or in a licence to the respondents could such be
arranged. I have been at a loss to understand, as I have said,
how failure to negotiate successfully for a sale or licence to
the respondents could be attributable to the existence of
Sir Herbert's patent : I am at a loss here to understand how any

A. C. AND PRIVY COUNCIL. 367

damage can be claimed to have resulted from the appellants' H. L. (E.)
inability to negotiate for sale in another direction when that 1935
inability necessarily resulted from their abortive negotiations Mecuanicat
with the respondents by which they hoped to benefit. eae
It was asked whether a plaintiff was to be prejudiced by an pre SuONS
attempt to settle. Surely not. But if he considers it to be to —anp
his interest to make that attempt and, as a term incident to Pees
its success, it is necessary that he do not offer the subject of AUSTIN

negotiation elsewhere, a claim for damages for any loss thereby ye
sustained on that score is like a gambler seeking a return of Moroney:
his stake after he has lost his bet. I suggest to your Lordships hae
that no kind of damage on this head traceable to the existence —_
of the Austin patent was proved—certainly none that had
any relation to such a sum as 35,000).
My Lords, the jury in this case were clearly of opinion that
the appellants had been shabbily treated by Sir Herbert
Austin ; they doubtless enjoyed his polite but severe cross-
examination, just as much as they resented the attack on the
veracity of Dr. Lehwess made also in cross-examination ;
they resented such a cross-examination at the instance of the
respondents. They were warned by the learned judge not to
punish the respondents. Their verdict in nearly every part
of it indicates in my eyes that the warning was unheeded.
The exoneration from the charge of conspiracy of Mr. Watkins
and the impossible finding of a conspiracy between Sir Herbert
and himself under the alias of his company, and the two assess-
ments of damage with no feature in common except the
magnitude of their amount, all indicate this to me.
I hold no brief for either Sir Herbert or his Company in this
matter. Had I been sitting in a Court of honour I would not
in relation to his conduct have discriminated too closely
between the mémoire descriptif with Fig. 1 and the draft
complete specification. I would have seen in each and not in
one more than in the other an obligation in honour on the part
of Sir Herbert not to utilize for his own purposes any informa-
tion thereby disclosed to him for the first time, without at
least informing the appellants of his intention so to do. But
the jury were not sitting as a Court of honour. The

368 HOUSE OF LORDS [1935]

H. L. (E.) punishment of the respondents for any offence was beyond
1935 their province. The endowment of the appellants out of the
Mxcuanicar proceeds was even more indefensible. The proper com-
Gut, pensation of the appellants for any legal wrong alleged and
oo. proved to have been done them by the respondents was their
iD only duty. And I conceive it to be one of the most important
LSHWESS functions of the Court in any case in which it finds that a jury
Austin has yielded to the besetting weakness, disclosed, as I think,

piven: here, to correct it. If the Court were to become hesitant in the

MotoR CO. exercise of that function, a jury in civil cases would soon become
a tribunal for the punishment of defendants for other than
legal wrongs committed or for the denial to plaintiffs of their
legal rights and all according to the length of its own foot,
instead of being, as in this case it alone was, a tribunal for
compensating the appellants for legal wrong suffered by them
at the hands of the respondents.

I will close with the citation of an authoritative statement
of the function of the Court in cases of this kind which
is to be found in Vaughan Williams L.J.'s judgment in
Johnston v. Great Western Ry. Co. (1): "If the Court, from the
circumstances of the case and the amount of the damages,
can draw the inference that the jury must have applied a
wrong measure of damage in contravention of the direction
of thé judge, the Court may order a new trial, although it is
not in a position to say that the mere quantum of excess is
so large that no reasonable jury could have arrived at such
an amount.'' And, my Lords, I have reached the conclusion,
satisfactory, at all events, to my own mind, that the inference
referred to by the Lord Justice is, in this case, inevitable.

This assessment should, therefore, I think beset aside as demon-
strablyexcessiveandunreasonable. But I amnotpreparedtosay,
as did the Court of Appeal, that no damage at all has been proved.
I am not, therefore, ready to support their order for nominal
damages only. But that does not mean that the issues on the
confidence agreement must all be sent for a new trial. It only
means that following the precedent set by this House in
Tolley v.].S. Fry & Sons, Ld. (2), thenew trial will be one confined

(1) [1904] 2 K. B. 250, 256. (2) [1931] A. C. 333.

Lord
Blanesburgh.

A. ©. AND PRIVY COUNCIL. 369

strictly in its scope to an assessment of damages on this head. H. L. (E.)
Fortunately, this should be a simple inquiry enough, one that —_1935
need not be either heated or prolonged. I note also that both Mecuanicat
the appellants and the respondents, in the circumstances Gyyenat
which I find existing, unite in proposing the adoption of that REE
course. The appellants make the suggestion in their printed AND

Case (para. 38 (f)) and the respondents in theirs (para. 142). Sener

AUSTIN
Lorp ATKIN. My Lords, I have had the advantage of anp THE

reading the opinion read by the Lord Chancellor and the opinion wees
about to be read by my noble and learned friend Lord Wright,
and as I agree with their reasoning and conclusions I should
have added nothing were it not that we are differing in one
respect from the decision of the Court of Appeal.

On the important question as to the duty of anappellate Court
when dealing with the verdict of a jury I desire to endorse in
every respect the detailed exposition contained in the opinion
of Lord Wright. I would only desire to add that once it has
been decided that a civil case has to be tried by a jury, that
tribunal and that. tribunal alone is the judge of fact ; and no
appellate Court can substitute its own findings for those of
the lawful tribunal. An appellate Court has a revising function
to see first whether there is any evidence in support of the issue
found by the jury ; and secondly whether the verdict can stand
having regard to the considerations which I will not restate
lest I should appear to seek to vary the expressions in the two
opinions I have mentioned. If in the latter kind of dispute
it is obvious that no verdict for the plaintiff on all the available
evidence could be supported, the Court may save the waste
of time in ordering a new trial which could have only one
possible result by ordering the verdict and judgment to be
entered for the defendant. I do not think that the rules of
Court go beyond that : and if they did I should doubt whether
they would be within the rule-making power.

In the present case as far as the licence agreement is con-
cerned it appears to me that the finding of the jury is
inconsistent with and impossible to reconcile with ascertained
fact—namely, the contemporaneous correspondence, and

therefore cannot stand.

370 HOUSE OF LORDS [1935]

H. L. (E.) I do not think that this decision should throw any doubt on
1935 the correctness of the finding of the jury on the other facts
Mecuanicat Of the case. It is plain that they accepted Dr. Lehwess as in
AND substance a witness of truth. His bona fides in maintaining

GENERAL

ss ae that the parties had come to an agreement on important

0. . : :

and _— points at the interview on September 3 was made manifest
LEHWESS by the terms of a contemporaneous letter to a business asso-

Austin ciate in Paris, rightly admitted in the circumstances by the

Austin. trial judge. But it is plain from the correspondence that
MoToR CO. Dr Tehwess did not in fact consider that the measure of
agreement, large as it was, which the parties had reached in
conversation, was sufficient in itself to constitute a contract by
which the parties were bound. The documents which are
referred to by the Lord Chancellor and Lord Wright make it
clear that he did not consider the Austin Company bound.
In these circumstances the letters plainly show that there was
no contract and the jury's verdict that there was cannot stand.
It is the kind of evidence in respect of which any jury is at a
disadvantage in a complicated case involving many disputed
allegations of fact and a correspondence extending over many
months. It can hardly be said that the jury lose sight of the
documents, for they barely see them. It is not surprising in
the circumstances that even a competent special jury may
have failed to notice the compelling significance of the written
word.

On the other branch of the case I can find no facts
uncontroverted or uncontrovertible which justify an appellate
Court in interfering with the verdict. There was ample
evidence to support the finding of contract and breach. I am
inclined to think that too much importance was attached to
the supposed intrinsic confidential nature of the information
disclosed. It is quite sufficient to support the contract
averred that the terms upon which the information was
disclosed were that it was to be used for a particular purpose
only. The giving of the information is ample consideration,
and use for any other purpose would be a breach. The
analogy of a contract of bailment I think supports this view.
The confidential nature of the information, the fact that it was

Lord Atkin.

A. C. AND PRIVY COUNCIL. 371

not known and could not be known to members of the public, H. L. (E.)
would in this view be relevant to damages rather than to 10935
formation of the contract. But in any case here there was FOTN Y
ample evidence upon which the jury could find both the ¢,AX?

ENERAL
contract put to them and the breach, a breach instantaneous, INVENTIONS

surreptitious and made for the advantage of the defendant, iy
who was specially qualified to form an opinion as to the value _.
of the information which he was wrongfully using. I find it AvstiN
impossible to agree that the damages which flowed from the Weer
breach of the contract were only nominal. The members of M0708 ©
the Court of Appeal, with respect, attached too much 1" Atkin.
importance to the isolated expressions of Dr. Lehwess that he
considered himself bound by the licence agreement and on

that account refrained from exploiting his patent. It is

unstable ground in view of the fact that the Court of Appeal

also took the view, shared by your Lordships, that in fact

Dr. Lehwess did not consider himself bound, and that for

that reason the verdict on the licence agreement must be set

aside. But in fact Dr. Lehwess could very properly treat

himself as bound to the Austin Company for commercial
purposes by a very close negotiation intentionally long drawn

out, while all the time the defendant Austin was secretly busy

availing himself of the plaintiffs' information in obtaining

patents for himself in England and all over the globe. The

jury were entitled to find a substantial period of time after
discovery of the breach in which Dr. Lehwess was entitled to

hold his hand. There was also evidence that the Lehwess
invention was of value, that the plaintiff lost a market which

would have been available for him at the time, and that the

rewards of a successful invention of the type would be very

great. It was pointed out that in one year the output of the

Austin factories alone was about 60,000 saloon cars, out of

which about 49,000 were fitted with what was then a com-

peting sunshine roof. I have not to consider whether I

myself would have found so large a sum. The amount of
damages was a matter peculiarly fit for determination by a

jury and I see no reason to set their decision aside. I also

wish to affirm my agreement with the concluding remarks of

372

H. L. (E.)
1935
—_

MECHANICAL
AND
GENERAL
INVENTIONS
Co.
AND
LEHWESS
v.
AUSTIN
AND THE
AUSTIN
Motor Co.

HOUSE OF LORDS [1985]

the Lord Chancellor, and particularly with his statement that
no censure was deserved in any respect by counsel who appeared
at the trial on behalf of the plaintiffs. I agree with the motion
proposed by the Lord Chancellor.

Lorp MAcMILLAN. My Lords, I have had the privilege of
reading in print the opinions delivered by the Lord Chancellor
and by my noble and learned friend Lord Atkin, and also the
opinion about to be delivered by my noble and learned friend
Lord Wright. I have only to say that I find myself in entire
agreement with them.

Lorp Wricut. My Lords, I have had an opportunity of
considering in print the opinion which has just been delivered
by my noble and learned friend on the Woolsack. I am in
complete agreement with everything that is said in that opinion,
and merely proceed to add a few observations because of the
important questions raised in regard to the functions of an
appellate Court when dealing with the verdict of a jury.

I concur with the Court of Appeal in the conclusion that
the jury's verdict in respect of what has just been described
as "' the licence agreement '' should be set aside. I do so for
the reasons set out by the Lord Chancellor, which seem to me
to bring the case within the language used by Lord Atkinson
in Banbury v. Bank of Montreal (1) in reference to Allcock v.
Hall. (2) What Lord Atkinson said was that in that case
"on an application for a new trial on the ground that the
verdict was against the weight of evidence the Court of Appeal,
applying the principle laid down in Metropolitan Ry. Co.
v. Wright (3), set aside the verdict, holding that it was utterly
irreconcilable with the evidence in the case when reasonably
considered."' Then (4) he describes another case in which
the Court of Appeal set aside the verdict of a jury on the
ground that the verdict was against the weight of evidence
as being a case where the Court acted on the basis that it was
one where there was conflicting evidence but an overwhelming

(1) [1918] A. C. 626, 678. (3) 1z App. Cas. 152.
(2) [1891] 1 Q. B. 444. (4) [1918] A. C. 679.

A. C. AND PRIVY COUNCIL. 373

balance of it on one side. That was Millar v. Toulmin (1), H. L. (E)
where, however, on appeal this House took a different view 1935
and restored the verdict of the jury: Toulmin v. Millar. (2) Mecusnicat
In the present case it is clear that the jury believed the evidence G,xvnar
given by Dr. Lehwess to the effect that an agreement had TSE NTIONS
been orally concluded : there was accordingly evidence on which —anp
they could so find. Indeed, as the Lord Chancellor has SEY res
explained, it seems clear that Dr. Lehwess himself honestly ere.
believed that he had made the agreement, though no doubt — Austin
at certain periods he thought the contrary. The Lord MEPO RSD:
Chancellor has pointed out how easy it might be for even a
careful jury to give undue weight to that evidence and forget
that it was completely irreconcilable with the totality of the
evidence in the case, in particular with the conduct and
statements of Dr. Lehwess himself. His conduct was in
truth quite inconsistent, on a careful contemplation of the
documents, with there having been the agreement which he
subsequently alleged and sought to establish at the trial :
equally inconsistent were his letters, to some of which the
Lord Chancellor has referred, and if I may take one further
instance of inconsistency, I may refer to the statutory
declaration which Dr. Lehwess made in the proceedings for
the revocation of Sir Herbert Austin's patent. In that
declaration he stated: "" On September 3, 1928''—the date on
which the oral agreement was afterwards alleged to have
been made—'" the draft agreement was discussed with Sir
Herbert Austin and generally agreed upon." It is on the
ground of this inherent inconsistency of Dr. Lehwess' own
story, when the totality of the material, oral and documentary,
is considered, that I think the verdict of the jury on this matter
cannot stand. I do not so decide simply because I myself
should have come to a different conclusion, or on the ground
- that the verdict of the jury is one which, on a mere balance of
evidence, does not appear to me to be reasonable. The
appellate Court is never the judge of fact in a case where the
constitutional judge of fact is the jury.

For the appellate Court to set aside the verdict of a jury as

(1) (1886) 17 Q. B. D. 603. (2) (1887) 12 App. Cas. 746.

Ae.C.1035: 3 2C

Lord Wright.

374

HW. Ly (EB)
1935

HOUSE OF LORDS [1935]

being against the weight of evidence, merely because the Court
does not agree with it, would, in my judgment, be to usurp the

Mecuanicar functions of the jury and to substitute their own opinion

AND
GENERAL
INVENTIONS
Co.
AND
LEHWESS
v.
AUSTIN
AND THE
AUSTIN
Motor Co.

Lord Wright.

for that of the jury : that would be quite wrong. Much more
is necessary in order to justify the setting aside of a jury's
verdict where there is some evidence to support it. No doubt
the test can be roughly described as being whether the verdict
of the jury was reasonable, but what is meant by reasonable
in this connection, must be carefully defined. I shall not
seek to make an anthology of the glosses in the
authorities upon the word "reasonable"? in order to warn
appellate Courts that they must not act merely on what appears
to them, on a reading of the shorthand notes, to be a con-
clusion more reasonable than that arrived at by the jury.
The right and duty of the Court to control the verdicts of
juries was recognized in early days: thus in 1655 in Wood v.
Gunston (1) Glyn C.J. said: "It is in the discretion of the
Court in some cases to grant a new tryal, but this must be a

judicial, and not an arbitrary discretion, and it is frequent in

our books for the Court to take notice of miscarriages of juries,
and to grant new tryals upon them."' And in Baker v. Dixte (2)
it was said: "' New trials came in the room only of attaints,
as a more expeditious and easy remedy."

The objection in Wood v. Gunston (1) was that the damages
were excessive, and a new trial was there ordered. The use of
the phrase '' miscarriage of juries '' is significant. It indicates
what there must be to justify the appellate Court in interfering
with or controlling the verdicts of juries. Since then many
cases have been reported on these matters, but I think most
useful guidance to help the appellate Court is to be found in
Metropolitan Ry. Co. v. Wright. (3) Lord FitzGerald (4)
states the question to be '' whether the evidence so preponderates
against the verdict as to show that it was unreasonable and
unjust '': and he adds that the onus is on the appellants to
establish that this condition is fulfilled. But the most
illuminating statement is, I think, to be found in the

(1) (1655) Style, 466. (3) 11 App. Cas. 152.
(2) (1736) Stra. 1051. (4) Ibid. 155.

Ae. AND PRIVY COUNCIL.

observations of Lord Halsbury. (1) He refers to the case of
Solomon v. Bitton (2), where the question according to the
report (the correctness of which was afterwards disputed
in Webster v. Friedeberg (3)) was stated to be '' whether the verdict
was such as reasonable men ought not to have come to."
Lord Halsbury said (1) that was an erroneous statement of the
principle. "Ifa Court,—" he proceeded, "' not a Court of Appeal
in which the facts are open for original judgment, but a Court
which is not a Court to review facts at all,—can grant a new
trial whenever it thinks that reasonable men ought to have
found another verdict, it seems to me that they must form and
act upon their own view of what the evidence in their judgment
proves. That, I think, is not the law. .... I think the test
of reasonableness, in considering the verdict of a jury, is right
enough, in order to understand whether the jury have really
done their duty. If their finding is absolutely unreasonable,
a Court may consider that that shows that they have not really
performed the judicial duty cast upon them ; but the principle
must be that the judgment upon the facts is to be the judgment
of the jury and not the judgment of any other tribunal. If
the word ' might ' were substituted for ' ought to' in Solomon
v. Bitton (2) I think the principle would be accurately stated."

Lord Halsbury in these valuable observations is, I think,
going back to the test applied in Wood v. Gunston (4), which
was whether there was a miscarriage of the jury. Thus the
question in truth is not whether the verdict appears to the
appellate Court to be right, but whether it is such as to show
that the jury have failed to perform their duty. An appellate
Court must always be on guard against the tendency to set
aside a verdict because the Court feels it would have come to a
different conclusion.

In this case, on these principles and for the reasons which I
have indicated, but which are more fully set out in the speech
of the Lord Chancellor, I think the appellants in the Court of
Appeal (the respondents in this House) satisfied the onus which
always rests on appellants who seek to set aside the verdict of

(1) 11 App. Cas. 156. (3) (1886) 17 Q. B. D. 736.
(2) (1881) 8 Q. B. D. 176. (4) (1655) Style, 466.
3 2C2

379

H. L. (E.)

1935
7

MECHANICAL .
AND
GENERAL
INVENTIONS
Co.
AND
LEHWESS
v.
AUSTIN
AND THE
AUSTIN
Motor Co.

Lord Wright.

376

H. L. (E,)
1935
——

MECHANICAL
AND
GENERAL
INVENTIONS
Co:
AND
LEHWESS
v.
AUSTIN
AND THE
AUSTIN
Motor Co.

Lord Wright.

HOUSE OF LORDS [1935]

a jury as being against the weight of evidence. The balance
of the evidence was overwhelmingly in their favour and the
totality of the evidence of Dr. Lehwess, oral and documentary,
was irreconcilable with that part of his evidence which asserted
the oral agreement. The verdict was one which the jury,
however comprehensible in all the circumstances their decision
might be, were not competent to find, that is, " might "' not
find, on the evidence.

On the second and alternative issue in the case, what has
conveniently been called '' the confidence agreement," I, like
the Lord Chancellor, concur with the conclusions of the Court
of Appeal until I come to the question of damages. On this
question it is all-important to note carefully the exact terms of
the answer of the jury to Question 7 ; by that answer the jury
found that the information was used in breach of the confidence
agreement by the defendants for the purpose of securing for
the defendant Austin patent protection in respect of the
plaintiff's construction or some substantial part thereof by
taking out Letters Patent No. 320486. Apart from any
question of damages it is immaterial how or why the respondents
committed a breach of that agreement, but in relation to
damages the essence of that finding is that the abuse of the
confidential information which constituted the breach was not
by inadvertence but was deliberate, and with the object of
securing a patent covering substantially the plaintiff's
construction : that finding involves an intention on the part
of the respondents to do what must necessarily prejudice the
appellants in their endeavour to exploit their own patent for
their profit. It seems on the evidence to be established that
what the respondents did had that effect. The whole evidence
on this issue has been examined before your Lordships and is
summarized by the Lord Chancellor. It is ample to support
the finding of the jury that there was this disingenuous design
on the part of the respondents thus to benefit themselves at
the expense of the appellants and by an abuse of confidence :
it is clear that all this was concealed from the appellants,
who were systematically induced to think that the respondents
were contemplating the purchase from the appellants of a

ARC. AND PRIVY COUNCIL.

licence under the appellant's patent, at least up to December,
1929. When they discovered what had been going on, the
appellants were placed in a difficult position. Substantial
damage to the appellants must, it seems, have been inevitable.
The jury were, as the Lord Chancellor explains, properly
directed and had all the facts fully before them. In considering
their award on damages, that view of the evidence most
favourable to their finding must be taken, not the view most
adverse to it, if or where two views are competent. It is
true that the damages awarded ran into big figures, but
damages cannot be treated as excessive merely because they
are large. Excess implies some standard which has been
exceeded. It is true that the damages could not be arrived
at otherwise than by estimate and conjecture : but that was
because the respondents' own conduct had made it impossible

STF.

H. L. (E.)
1935
—_

MECHANICAL
AND
GENERAL
INVENTIONS
Co.
AND
LEHWESS
Uv.
AUSTIN
AND THE
AUSTIN
Motor Co.

Lord Wright.

to put to practical test during the period of delay complained

of, the money value of the appellant's invention. As to
definite figures, the jury had before them, besides the other
considerations adverted to by the Lord Chancellor, the fact
that in a single year the respondents had paid (to another
concern) 5000/. in royalties under a non-exclusive licence to
use on their cars a type of '' sunshine '' roof competing with that
patented by the appellants.

I cannot agree with the Court of Appeal that the damages
were nominal. Their reasoning is, in my opinion, on lines
too narrow to accord with the realities of the situation. My
only doubt has been whether the amount found by the jury
was so large as to make it necessary after three prolonged
hearings to order yet a further trial, which would in that
case be limited to the question of damages. I have had some
difficulty on this matter. I do not in the least say that I
should have awarded the same amount myself. But that is
not the relevant consideration. Most of the reported cases
on the question of excessive damages are naturally cases
of tort: in contract the damages are generally capable
of more or less precise ascertainment, though it
sometimes happens—as here—that they must be matter
of conjecture. But in general in contract a new trial

378

H. L. (B)
1935
~

MECHANICAL
AND
GENERAL
INVENTIONS
Co.

AND
LEHWESS
v.
AUSTIN
AND THE
AUSTIN
Moror Co.

Lord Wright.

HOUSE OF LORDS [1935]

is ordered, if at all, because of some error in law. But where
there is no error in law the principles are well stated by
Lord Esher in Praed v. Graham (1), where he said " the rule
of conduct " for the appellate Court when considering whether
a verdict should be set aside on the ground that the damages
are excessive, "is as nearly as possible the same as where
the Court is asked to set aside a verdict on the ground that
it is against the weight of evidence.'' Lord Esher adds that
the Court cannot set aside the verdict merely because it is
larger than they themselves would have given, but only if
"having regard to all the circumstances of the case, the
damages are so excessive that no twelve men could reasonably
have given them." He treats that statement as equivalent
to the definition given by Fitzgerald J. and approved by
Palles C.B. in M'Grath v. Bourne (2), that to justify setting
aside the verdict on the ground of excessive damages " the
amount should be such that no reasonable proportion existed
between it and the circumstances of the case.'' Lord Esher's
statement of principle was approved by another master of the
common law, Vaughan Williams L.J., in Johnston v. Great
Western Ry. Co. (3)

These tests seem to me to correspond to the tests which
I have sought to apply in considering the verdict of the jury
on the licence agreement. But whereas in the former matter
I find that the verdict was one the jury could not " reasonably "'
find because it involved an irreconcilability or want of pro-
portion between it and the whole circumstances of the case,
I do not find in the verdict on damages any such irreconcil-
ability or want of proportion between these damages and the
whole circumstances of the case. On the question of damages
the respondents have not satisfied me that the verdict was
one which was " unreasonable '' in the sense that the jury
"might '' not come to it, or one which was against the over-
whelming balance of the evidence. Nor can I find that the
jury were partial or perverse: and again I should desire
to quote and apply here the observation which Viscount

(24 OF Bw Das 3 ns. (z) I. R. 10 C. L. 160, 164.
(3) [1904] 2 K. B. 250.

Ase; AND PRIVY COUNCIL. 379

Hailsham L.C. made in Tolley v. J. S. Fry & Sons, Ld. (1), in H. L. (EB)
reference to that case: "' I cannot seein the facts of this case 1935
any ground for saying that the amount of the damages Mecuantcar
awarded is so excessive as to warrant the inference that the Gyn,

jury took a biassed or mistaken view of the whole case." IsvExtioNs
Thus applying mutatis mutandis the same principle to the — ano
verdict of the jury on the question of damages as I applied ea gis ee
on the question of the licence agreement, I conclude that Pe
the verdict on damages should not be interfered with. AUSTIN
I may add that the order of the Court of Appeal on the Monee
Lord Wright.

issue of the licence agreement, not merely setting aside the
verdict of the jury, but ordering judgment to be entered
upon it, was in my opinion justified under Order Lvul., r. 4.
That course was followed in Banbury v. Bank of Montreal (2),
where the verdict of the jury for the plaintiff being set aside,
judgment was entered by the appellate Court for the defendants.
That was a case where the verdict was set aside on the ground
that there was no evidence at all to justify a verdict for the
plaintiff, but I think it is clear that under r. 4 the same course
is competent where the verdict is set aside as being against
the weight of evidence: in this respect no distinction can
be drawn between the two grounds for setting aside a verdict.
That was the opinion of the Court of Appeal in Adcock v.
Hall (3), where judgment was entered for the defendant, not
because there was no evidence at ail to support the verdict,
but because the verdict was against the weight of the evidence.
In Millar v. Toulmin (4) the Court of Appeal had gone
further and entered judgment for the plaintiff after setting
aside the verdict as being against the weight of the evidence.
When this House reversed that judgment in Toulnun v.
Millar (5) Lord Halsbury expressed a doubt whether r. 4
gives jurisdiction to the Court of Appeal to find a verdict
for themselves. I should venture to think that for the Court
so to do would amount, not to controlling, but superseding
the jury and exercising the function of affirmatively finding

(x) [1931] A. C. 333, 341. (3) [1891] 1 Q. B. 444.
(2) [1918] A. C. 626. (4) 27 OF B.D). G03,
(5) 12 App. Cas. 746.

380 HOUSE OF LORDS [1935]

H. L. (E.) the facts. Apart from Millar v. Toulmin (x) I know of no
1935 case where this course has been taken. I agree with the
Mecuanicat Observations on this point of my noble and learned friend
AND ~—_ Lord Atkin. But with him I think it is clear that the order

GENERAL
een of the Court of Appeal in the present case so far as it deals
oO

AND with the issue under the licence agreement is justified under

ss Ordetieviie Tap

eae On the whole case I desire to concur with the motion
AND
Austin proposed by the Lord Chancellor.

Motor Co.

Ordered and adjudged that the order of the Court
of Appeal in part complained of im the
original and cross-appeals be varied, and that
on the agreement referred to in questions ©
and 7 submitted to the jury judgment be
entered for the appellants for the sum of
35,0001. and that the said order, except so
far as aforesaid, be affirmed: Ordered that
the respondents in the original appeal do pay
to the appellants in the original appeal, ihe
costs of action in the King's Bench Division
of the High Court of Justice, except so far
as the said costs have been increased by the
claim under the alleged agreement to take a
licence, and by the claim in respect of the
alleged conspiracy and by the claim for
special damage, and that the appellants in
the original appeal do pay to the respondents
in the original appeal the costs in the King's
Bench Division of the High Court of Justice,
in vespect of the claim under the said alleged
agreement and the claim tn respect of the said
alleged conspiracy and the claim for the said
special damage: Further ordered, that the
appellanis im the original appeal do pay
to the respondents in the original appeal,
the costs in the Court of Appeal, except so

(t)c72@. Be A603"

AEC AND PRIVY COUNCIL. 381

far as the said costs were increased by the H. U.. (E.)
appeal against the verdict of 35,0001. on the 1935
agreement referred to in questions 6 and 7, Mecuantcat
and that the respondents in the original Guswray
appeal do pay, or cause to be paid, to the eghon tieolg
appellants in the original appeal, the costs of — anv
the appeal in the Court of Appeal, in respect 5 ae

v.
of the appeal against the said verdict: Further Astin

ordered that the respondents in the original "AUSTIN"
appeal, do pay to the appellants in the original mae
appeal, the costs in respect of the original

appeal to this House, except in so far as the

said costs have been increased by the appeal

against the said alleged agreement to take

a licence, and that the appellants im the

original appeal do pay, or cause to be paid,

to the respondents in the original appeal, the

costs in the original appeal to this House in

vespect of the said alleged agreement: Further

ordered, that the said cross-appeal, be, and the

same is hereby, dismussed this House : Further

ordered, that the appellants in the cross-appeal

do pay to the respondents in the cross-appeal,

the costs in respect of the said cross-appeal.

Lords' Journals, March 14, 1935.