King v Ivanhoe Gold Corporation Limited - [1908] HCA 75

7 CLR 617

IVANHOE GOLD CORPORATION LIMITED RESPONDENT. New trial-Breach of contract-Amount of damages left at large to jury -

Admissibility of evidence.

The plaintiff was engaged by the manager of the defendant company's mine to improve the poor extraction of gold. According to his evidence no amount was fixed as payment for the work, but as the extraction improved the manager of the mine said that the results were a long way better than he could ever hope for, and that ordinary payment was out of the question, and said " If the extraction is still the same at the end of July, the Ivanhoe Company will pay you handsomely, but you will have to take the risk of the extraction being all right then, and payment will depend on results." The plaintiff's efforts were successful, and he brought an action for £5,000. The presiding Judge directed the jury that the reward was to be commensurate with the result, and they brought in a verdict for £3,600, the amount which plaintiff first claimed when the company failed to pay him anything. This amount was apparently arrived at at 10 per centum on £36,000, which amount was alleged to be annually saved by reason of plaintiff's success.

Held, that in an action for damages for breach of contract there must be some measure of damages capable of being laid down to the jury, and that the question cannot be left at large to them. Under the circumstances of the present case the proper rule would be to ascertain what would under ordinary circumstances be fair remuneration for the actual services rendered, and to increase that amount by what is reasonable to make it "handsome payment."

Decision of the Supreme Court affirmed.

7 CLR 618

THE plaintiff, a metallurgist, brought an action for £5,000 for

services rendered to the defendant company. The jury awarded him £3,600. The facts appear fully in the judgment of Griffith C.J. The defendant company appealed to the Full Court of Western Australia, and the judgment was set aside and a new trial ordered. From this decision the plaintiff now appealed to the High Court.

Pilkington K.C. and Stow, for the appellant. This was not a case where plaintiff was to be rewarded with the ordinary remuneration for a metallurgist, but he was to be paid hand- somely. This case is analogous to that of salvage, and the jury in assessing the amount of damages to be awarded were entitled to look to the large saving to the company that the plaintiff's efforts resulted in.

If a new trial is now granted the only point to go to the jury should be that of the amount of damages: See English Rules, Order XXXIX., r. 7; Western Australian Rules, Order XXXVII, r. 6. [The following cases were referred to: - Johnston v. Great Western Railway Co. 1; Mutual Life Insurance Co. of New York v. Moss 2.]

Keenan, A.-G. for Western Australia, and Draper, for the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading King v Ivanhoe Gold Corporation Limited

Details

AGLC: King v Ivanhoe Gold Corporation Limited [1908] HCA 75
Case: [1908] HCA 75
Decision Date: 17 November 1908

CaseChat Overview and Summary

The High Court of Australia considered an appeal by the plaintiff, Mr. King, against a decision of the Supreme Court of Western Australia. The dispute arose from a contract where Mr. King was engaged by the manager of Ivanhoe Gold Corporation Limited to improve the company's gold extraction process. Mr. King claimed that no fixed sum was agreed upon, but that he was promised "handsome payment" if his efforts were successful, with payment depending on results. His work proved successful, and he subsequently sued for £5,000. The jury awarded him £3,600, which was apparently calculated as 10% of an estimated annual saving of £36,000. The Supreme Court had set aside this verdict and ordered a new trial.

The central legal issues before the High Court were whether the jury had been correctly directed on the assessment of damages for breach of contract and, consequently, whether the damages awarded were excessive. Specifically, the court had to determine the proper measure of damages in a contract where payment was conditional on success and described as "handsome," and whether the jury had been permitted to leave the amount of damages at large. The court also considered whether a new trial should be limited to the issue of damages or encompass the entire case.

The High Court reasoned that in an action for breach of contract, there must be a discernible measure or basis for calculating damages, which cannot be left entirely to the discretion of the jury. The court held that the proper approach was to first ascertain what would constitute fair remuneration for the actual services rendered under ordinary circumstances, and then to increase that amount by a reasonable sum to reflect the promise of "handsome payment" and the risk undertaken by the plaintiff. The jury's direction, which allowed them to award a sum commensurate with the result or based on the benefit derived by the company, was deemed incorrect. The court affirmed the Supreme Court's decision that a new trial was necessary due to the improper assessment of damages.

The High Court dismissed the appeal, upholding the Supreme Court's order for a new trial. The court found no reason to interfere with the Supreme Court's discretion in ordering a new trial on the whole case, given the interconnectedness of the issues and the potential for the jury's error on damages to have influenced other aspects of their findings.

Orders