1. By these Points of Defence the Defendants plead in answer to the claims for damages and interest set out in paragraphs 22 to 31 inclusive of the Plaintiff's 7th affidavit herein (those paragraphs being hereinafter referred to as "the Points of claim").
2. Except where stated otherwise, references in this pleading to paragraph numbers are references to paragraphs of the Points of claim.
Lost Royalties (paragraphs 22 to 26)
ENTITLEMENT AND BASIS OF ASSESSMENT
3. It is admitted that the Plaintiff is entitled to recover damages in respect of lost royalties.
4. It is averred that the correct measure of damages under this head is the amount of the royalties which the Plaintiff would have received had
the Defendants published the Plaintiff's work (acting at all times in good faith) and paid the Plaintiff a fair royalty in respect of those copies sold.
5. It is admitted that it is appropriate to assess such damages in respect of probable sales over a period of 5 years.
PROBABLE SALES
(a) General sales
6. It is admitted that comparison with sales figures for published works is an appropriate method of estimating the probable sales of an unpublished work such as Making Names, provided full account is taken of differences in character and quality between Making Names and any published work with which it is compared.
7. It is denied that sales figures for Colin Wilson's The Outsider, or Douglas Hofstadter's Godel, Escher, Bach constitute any proper basis for estimating the probable sales of Making Names.
8. Pending receipt of documentary evidence substantiating the same the Plaintiff's allegations as to when, where in what numbers or in how many languages The Outsider and Godel, Escher, Bach were published or sold are not admitted. Nor is any admission made as to A. J. Ayer's Language, Truth and Logic. It is, however, admitted and averred that both The Outsider and Godel, Escher, Bach were exceptionally successful books.
9. The Points of claim disclose no basis for any contention that Making Names was likely to achieve exceptional success to the degree
attributed to the Wilson and Hofstadter books or at all. It is denied
that the letter from Alan Ryan to Henry Hardy dated 18th July 1985 is capable of supporting the Plaintiff's contention. The Defendants will refer to the letter at the hearing for its full terms and effect.
10. It is denied that Making Names was in fact likely to achieve exceptional success to the degree attributed to either of the said
works or at all.
11. The Defendants will say that successful contemporary philosophical titles in their list such as Parfit's Reasons and Persons, Hare's Moral Thinking, and Raphael's Moral Philosophy, achieved sales of approximately 12,000, 10,000 and 8,000 respectively in the first five years of publication. The Defendants will further say that Glover's
Causing Death and saving Lives, published only in paperback and
intended for general reader and student alike, achieved annual sales of
between 4,500 and 5,000 and is a highly successful book by a well-known
and successful author.
12. In the premises, the Plaintiff's estimate of general sales of 250,000 (45,000 in hardback) is expressly denied.
13. The Defendants do not admit that Making Names would have achieved general sales of 2,000 copies, or in excess of that number.
(b) Adoption of Making Names as an academic set text
14. It is expressly denied that Alan Ryan made any prediction, as alleged in paragraph 25, or that the Plaintiff has any or any sufficient basis
for a claim for damages calculated on the footing that Making Names
would have been adopted as a text for 'A' level and Open University
philosophy courses.
15. The letter referred to in paragraph 25 contained no reference to
University courses generally, and the Points of claim disclose no basis
for the contention that Making Names would have been adopted as a set text for any university philosophy courses other than Open University
courses.
16. It is denied that Making Names would in fact have been adopted as a textbook for 'A' level and Open University students, or for university philosophy major courses, as alleged in paragraph 25 or at all.
17. As to the figures for enrolments and applications set out in the table in paragraph 25,
(1) with regard to 'A' level philosophy, it is averred that the
numbers who entered for such examinations in 1988, 1989 and 1990
and the numbers who sat such examinations in each of the years
1986 to 1990 are accurately set out in letters to the Plaintiff
from AEB dated 28th July 1988 (A21) and 14th February 1991 ("AM8"
p.16);
(2) with regard to the Open University, it is averred that the facts stated in a letter from the Open University to the Plaintiff dated 2nd August 1988 (Al9) are accurate;
(3) as to university philosophy major courses, it is averred that the figures set out in the letter from UCCA to the Plaintiff dated 28th February 1991 are accurate;
(4) there is an arithmetical error in the total in the second column of the table in paragraph 25, the correct figure being 2,437, but otherwise the arithmetical accuracy of the table is admitted.
18. Except as aforesaid, the accuracy of the figures in the table in paragraph 25 is not admitted.
| Year | No. |
| 1986 | 299 |
| 1987 | 330 |
| 1988 | 434 |
| 1989 | 446 |
| 1990 | 476 |
| 1,985 |
(2) The tabulated figures for Open University enrolments include not only students taking the 2 courses classified in the philosophy discipline (A310 and A311) but also all but 3 of all other open University courses containing any section relevant to philosophy. As regards first or second level courses (those designated with an initial number 1 or 2) it is denied that Making Names would have had any realistic prospect of becoming a set text for any or these. The Defendants will say that for the majority of such courses no set text is prescribed; for the first level Arts Foundation course and the second level courses on Fifth Century Greece and The Enlightenment, one classic philosophy text (respectively Mill's Utilitarianism, a text of Aristotle and Hume's Enquiries) is prescribed. As regards the single fourth level course (A403) there are no set texts.
(3) The tabulated UCCA figures are those for applications rather than acceptances; only students accepted for a course can plausibly be supposed likely to purchase a set book; the acceptances were:
| Year | No. |
| 1986 | 408 |
| 1987 | 388 |
| 1988 | 599 |
| 1989 | 460 |
| 1990 | 588 |
| 2,443 |
FORMAT AND PRICE
20. It is admitted and averred that the Publishing Proposal Form dated 18th June 1985 ("the PPF") (B54) contemplated publishing Making Names in hardback at a UK retail price of £15.00 with an initial print run of 2,000.
21. As to a paperback edition,
(1) it is denied that any proposal for paperback publication of Making Names was ever put to or approved by the Delegates of the oxford University Press;
(2) it is admitted that had Making Names sold successfully in hardback the Defendants would have proceeded to publish a paperback edition;
(3) it is not admitted that Making Names would have sold successfully in hardback, and accordingly it is not admitted that any paperback edition would have been published;
(4) it is denied that a paperback edition (if any) would have been priced at £8.95 as assumed in paragraph 26; the Defendants will say that (as Henry Hardy told the Plaintiff in their telephone conversation of 19th July 1985: "AM8" p.13 ll.181-183) the retail price for a paperback edition would probably have been £6.95.
ROYALTY RATES
22. It is admitted and averred
(1) that in respect of hardback sales of Making Names the Defendants would have paid royalties at the rates set out in the PPF, namely 12% of net receipts on UK sales, and 10% of net receipts on sales in North America and other overseas territories;
(2) that an average royalty of £1.052 per copy (being 11.5% of net
receipts as calculated in the PPF) would accordingly have been
payable to the Plaintiff in respect of hardback sales of Making Names.
23. As to a paperback edition (if any) the Defendants will say:-
(1) that a royalty of 10% of net receipts on UK sales and 8% of net receipts on overseas sales would have been paid;
(2) that overall discounts granted by the Defendants for UK sales are in the region of 40% of the retail price, and for overseas sales in the region of 60%;
(3) that generally over half of the sales of OUP philosophy works are made abroad;
(4) that the average royalty rate on any paperback sales would accordingly have been no more than 9% of net receipts, and average net receipts would have been no more than 50% of the retail price;
(5) that on the above assumptions the average royalty paid per paperback copy of Making Names would accordingly have been 31.275p on the said retail price of £6.95.
Interest (paragraph 27)
ENTITLEMENT
24. It is admitted that in respect of his lost royalties claim the
Plaintiff is entitled to recover interest pursuant to section 35A of
the Supreme Court Act 1981, but it is denied that he is entitled to interest calculated in the sums or calculated in the manner set out in paragraph 27.
RATE OF INTEREST
25. The Defendants do not admit that the rate of interest claimed in paragraph 27 (namely the Judgment Act rate of 15%) is an appropriate rate of interest; the Defendants will contend that interest should be assessed at a rate of 1% above bank base rate at the relevant times.
26. It is denied that the Plaintiff is entitled to recover compound interest as claimed in paragraph 27. The Points of claim disclose no basis, and there is no basis in law, for such a claim.
PERIOD FOR INTEREST CALCULATION
27. subject to paragraph 33 below (relating to the impact of income
taxation) it is admitted and averred that interest is recoverable on
damages for lost royalties in respect of the periods from (a) the dates
on which the Plaintiff would have been entitled to payment of royalties to (b) the date of judgment.
28. It is denied that the Plaintiff would have been entitled to payment of royalties from the dates set out in paragraph 27. It is averred that:
(1) the revised version of Making Names was submitted by the
Plaintiff in February 1986, and considered between that date and
May 1986; thereafter, the Defendants would have required a year
to make all necessary preparations for the book's publication,
and accordingly Making Names would have been first published in
or about may 1987;
(2) at all material times it was the Defendants, practice to make up
a statement of sales annually to 31st March, and to render such
account together with payment of royalties due thereon 4 months
thereafter; that is a practice which the Defendants were entitled
to and would have followed in this case;
(3) accordingly, interest falls to be calculated from 31st July 1988
in respect of those sales of Making Names which would have been
made in the period to 31st March 1988, from 31st July 1989 in
respect of sales to 31st March 1989 and from 31st July 1990 in
respect of sales from 31st March 1990. In respect of sales in
the year to 31st March 1991 (if any) interest will fall to be awarded only if and to the extent that final judgment is entered after 31st July 1991.
RATE OF SALES
29. It is admitted that 75% of the total sales of Making Names would probably have been made in the first 2 years of publication, as is assumed for the purposes of the calculations in paragraph 29.
THE CALCULATION OF INTEREST
| Interest Rate | Percentage of sales | Years of Receipt | Percentage of Royalties |
| Year 1 | 15/100 x | 75/100 x 1/2 x 3 | x 100/1 = 16.875 |
| Year 2 | 15/100 x | 75/100 x 1/2 x 2 | x 100/1 = 11.25 |
| Year 3 | 15/100 x | 25/100 x 1/3 x 1 | x 100/1 = 1.25 |
| Total = 29.375 |
31. otherwise, it is not admitted that the Plaintiff is entitled to recover any interest.
Taxation (paragraph 28)
DAMAGES
32. it is admitted that in assessing the Plaintiff's entitlement to damages under paragraphs 22 to 26 no damages will be taxable in the Plaintiff's hands.
INTEREST
33. It is, however, averred that account must be taken of taxation in assessing interest pursuant to the claim under paragraph 27. Royalty payments would have been chargeable to income tax in the Plaintiff's hands. Accordingly, interest (representing compensation for the loss of use of money) must be calculated upon the net sum which would have been in the Plaintiff's hands after payment of income tax chargeable on royalties received.
Lost opportunity to gain reputation (paragraph 29)
34. It is admitted that the Plaintiff is entitled to recover general damages for loss of publicity.
35. otherwise, no admissions are made as to any of the allegations contained in paragraph 29.
Loss of ability to deal with publishers (paragraph 30)
36. No admissions are made as to the allegations of fact contained in paragraph 30.
37. It is in any event averred that no damages are recoverable in law in respect of any such loss as there alleged; loss of that character is too remote in law, not being within the contemplation of the parties.
Pain and suffering (paragraph 31)
38. Even if the Plaintiff can show that has suffered distress in consequence of the Defendants, breach of contract (which is not admitted) it is averred that no damages are recoverable in law in respect of such loss or injury as alleged in paragraph 31, the same being too remote in law because the object of the contract was not to provide peace of mind or freedom from distress.
General traverse
39. Except as expressly pleaded to above each and every assertion contained in the Points of Claim is denied as if the same were hereinafter set out and traversed.
HARVEY MCGREGOR Q.C.
MARK WARBY
SERVED this is day of May 1991 by Clifford Chance of Blackfriars House, 19
New Bridge Street, London EC4V 6BY, solicitors for the Defendants.
Go to Oxford's Admissions of Facts (Damages Defence 2).
Click for the Malcolm vs. Oxford I (1984-92) Index or the Malcolm vs. Oxford II (2001-02) Index
Go/return to the Affidavits: Ivon Asquith (1), Asquith (2), Henry Hardy, William Shaw (solicitor) (1), Sir Roger Elliott (1), Margaret Goodall, to the Witness Statements: Elliott, Hardy, Richard Charkin, Nicola Bion, Goodall, to the courtroom testimony of the Oxford Six, 14/3/1990: Elliott, Goodall, Bion, Asquith, Charkin, Hardy, to the testimony of Andrew Malcolm, 13/3/1990, to the Statement of Claim, to the Case History, to the Chancery Court Judgment, to the Appeal Court Judgment.