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Torts: Intentional Economic Torts (Inducing breach of contract ((2) D…
Torts: Intentional Economic Torts
Inducing breach of contract
(1) existence of contract between P and 3P
not where contract has not been validly formed, void/voidable, can be lawfully terminated
(2) D induced 3P to breach contract with P
(actual inducement)
cf unified theory (discarded)
Persuasion
directed at contracting party and with effect of influencing him
not mere concurrence (
Lines International Holdings v Singapore Tourist Promotion Board
)
not mere information or advice (
D C Thomson v Deakin
)
distinction depends on effect and intention, circumstances and manner of conveyance, whether
direct
and effective cause (see direct/indirect theory), depends on facts of the case (G. Chan)
NOT prevention
:red_cross:
G.Chan: no, due to
OBG
(
GWK v Dunlop Rubber
should have been unlawful interference not inducement)
Unlikely (slides)
Inconsistent dealing (contentious, unlikely)
:green_cross:
D agreeing to a transaction which he knew to be inconsistent with the offeror's (3P) other obligations to P (
British Motor Trade Association v Salvadori
)
criticised as minimal interference and not really inducement but contract breaker's own conduct
Breach of contract
does not require contract breaker to be actually liable, can be exempted from liabillity e.g.. force majeure clauses, but there is breach (
Torquay Hotel v Cousins
)
prevention/hindrance without breach insufficient (
OBG
which overrides
Torquay Hotel v Cousins
) because it is a tort of secondary liability
(3) D acted with necessary knowledge and intention
subjective knowledge
that he was inducing breach of contract, not just the act + intention to do so with knowledge of consequences
specific subjective
intention
required, including
ends
and
means
but excluding mere foreseeable
consequences
(
OBG v Allen
disagreeing with
Millar v Bassey
; similarly in
Tribune Investment v Soosan
)
intention to cause breach
(even if no intention to cause harm
South Wales Miners' Federation v Glamorgan Coal Co Ltd
)
Knowledge also:
conscious decision not to inquire into fact though they had means of knowledge (
Emerald Construction v Lowthian
) or suspicion of a truth (
OBG v Allen
)
recklessness in the sense of being indifferent whether or not a breach happens (
Tribune Investment v Soosan
) but not recklessness as negligence or even gross negligence (
OBG
) e.g. D held not liable because of honest and reasonable belief in Ps' assurances that he was not breaking contract is OK (
Mainstream Properties v Young
)
General
protection of contractual rights
no general tort of knowingly and intentionally procuring actionable wrong
tort of accessory/secondary liability; an actionable wrong must be committed by 3P
procurement of another to commit an actionable wrong incurs liability as an accessory
(
Lumley v Gye
)
arose due to privity of contract, P could not sue 3P
(4) D had no justification
Moral duty
(
Brimelow v Casson
)
Protection of equal or superior legal right
(
Edwin Hill and Partners v First National Finance Corp
)
D extended loan to 3P on condition of substituting P with other architect
right as mortgagee to be repaid under the loan agreement was superior to P's contractual rights, P would have been no better off
pre-existing contract > P's subsequent inconsistent agreement (G. Chan)
Causing loss by unlawful means
tort of primary liability based on intention to interfere with liberty of others by unlawful means
protection from intentional infliction of loss through independently unlawful conduct
Unlawful interference with trade or business
(
Allen v Flood
;
Quinn v Leathem
)
(1) unlawful means against 3P
:red_flag:"independently unlawful" standard results in importing of concepts of unlawfulness not designed for purposes of sanctioning excessive competitive conduct (
Prof Roderick Bagshaw
)
Unlawful act/means
:warning:
(actionable wrong or any unlawful conduct?)
acts (2) intended to cause loss to P by (3) interfering with the freedom of a 3P (1) in a way which is unlawful as against that 3P (
OBG
)
TEST: :check:
act which would have been actionable by 3P if he had suffered loss, even though 3P in fact did not suffer loss but P did
(Hoffman in
OBG
citing
National Phonograph v Edison-Bell Consolidated Phonograph
;
Lonrho v Fayed
HL) -> torts and breach only?
:red_flag: not
statutory liability/crimes
which would not afford cause of action, i.e. not actionable wrong (Hoffman)**
cf dissenting criticism of arbitrariness of exclusion, strange to have breach of contract actionable but not crime, prefer to include all kinds of unlawful conduct as per tort's purpose to
curb clearly excessive conduct
rather than to merely extend liability for actionable wrongs; prevent overextension by requiring "
instrumentality
" of 3P (Nicholls)
Hoffman: if expand "unlawful means" to all types; then need to tighten requirement downstream to prevent infringement of free market -> don't expand because doesn't match historical nature, "instrumentality" unpredictable
Nicholls: should expand "unlawful means" to simplify; use "instrumentality" requirement to squeeze
Two interests: protection v competition
(3) by interference with freedom of 3P to deal with P
sold bootleg records at Elvis Presley concerts without consent, even though they potentially reduced profits of P, but caused not interfere or prevent Presley estate from doing any other act affecting plaintiff (
RCA Corporation v Pollard
)
yes :red_flag: indirect three-party interferences only, prevent swallowing up of other torts (G. Chan)
(2) intention to cause harm to P
ends or means
not motive, need not be predominant desire (
Lonrho v Fayed
)
(4) harm is in fact caused
common law reluctance to become involved in devising rules of fair competition;
preference for Parliamentary legislation
(
OBG
citing
Mogul Steamship v Mc Gregor Gow
as illustration)
"...designed only to enforce
basic standards of civilised behaviour in economic competition,
between traders or between employers and labour. Otherwise there is a danger that it will provide a cause of action based on acts which are wrongful only in the irrelevant sense that a third party has a right to complain if he chooses to do so."
"it is not for the courts to create a cause of action out of a regulatory or criminal statute which
Parliament did not intend to be actionable in private law
"
causal connection between wrongful conduct and loss by itself not sufficient (
OBG
)
Civil actionability of penal statutes
:warning:
General rule that where a statutory duty is expressed to be enforceable by criminal prosecution only may not be enforced in any other manner (
Lonrho v Shell
) Two exceptions:
statutory provision is for benefit of particular class of individuals to which P belongs
statue creates public right and P has suffered special damage (
Gouriet v Union of Post Office Workers
)
-
uncertainty as to its interaction wtih
OBG
unlawful means tort (15.042 G.Chan)
Intimidation
Two-three-party distinction?
:red_flag: (
OBG
)
or one tort since both are based on coercion as unlawful means (favoured by G Chan)
solves difficulty (intimidation actionable but not actual breach) where threat is breach of contract by restricting it to only 3 party scenarios
no two-party torts? (slides,
Total Network
?)
Two-party intimidation
(wrongful coercion)
(Berezovsky -> threat to do something unlawful or illegitimate -> illegitimate: possibly include lawful conduct?)
Three-party intimidation
(Hoffman wants to bring this into causing loss by unlawful means)
Hoffman: threat + demand = unlawful means
e.g. unlawful threats to intimidate potential customers
(
Garret v Taylor
;
Tarleton v M'Gawley
,
Allen v Flood
)
e.g. unlawful threat to employer with intention of causing loss to employee (
Rookes v Barnard
)
(1) Threat
must be coercive, imply adverse consequences
not warnings or advice, or idle abuses
Threat extended to breach of contract
not just violence and other tortious acts since threat of breach may be even more coercive when directed towards companies
(
Rookes v Barnard
)
(2) Unlawful conduct or means
threatened use of unlawful conduct as basis for wrong; cannot be lawful conduct threatened (
Rookes v Barnard
)
focus on threat of unlawful means, not the act threatened
(1) any
tort
(2)
breach
of contract with 3P so causing injury on P
(3) threat to commit
crime
(all? Hoffman in OBG (no) vs Rookes (yes)) :red_flag:
(4) (Berezovsky -> threat to do something unlawful or
illegitimate
-> illegitimate: possibly include lawful conduct?)
Justification?
possibility alluded to in
Rookes v Barnard
but still uncertain
can limit scope of "unlawful means"
BUT how to justify? uncertainty in application? court reluctant to adjudicate on fairness or merit?
Conspiracy
Civil conspiracy
Unlawful means conspiracy
(wrongfulness lies in composite course of conduct/all its elements) (
Marinteknik
) although combination seems be critical in supplying tortious liability where there is extension of unlawful conduct beyond beyond actionable wrongs
(3) Unlawful means
:warning:
:red_cross: conspiracy limited to
actionable wrongs
, is a species of joint liability/secondary liability (Hazel Carty;
Trek Technology (Singapore) v FE Global Electronics
)
-
G Chan: would render conspiracy tort superfluous to underlying claim
EFT Holding v Marinteknik
,
Beckkett v Deutsche Bank AG
preferring
Total Network
inclusion of crime and torts, whether or not crime is also actionable as civil wrong
:check:
does not have to be independently actionable
; unlawfulness simply used to identify "sufficiently reprehensible" conduct, actionability not essential (
Total Network
, obiter preference in
Marinteknik
obiter) -> inclusion breach of regulations and crimes (but not any crime, too wide)
difference justified by circumstances: 3 party tort in OBG; 2 party in Total Network
two party conspiracy by unlawful means neither a form of accessory liability or tort of causing loss by unlawful means (
Total Network
)
Civil actionability of penal statues
whether already governed by
specific legislation
; has legislator made exhaustive provisions; would the tort unjustifiably encroach on other statutory regimes? (
Quah Kay Tee v Ong and Co Pte Ltd
) (see right)
(1) Combination/concerted action
inferred from overt acts, unlawful act itself (combination often considered together with unlawful act in practice, though theoretically discrete (
The Dolphina
cited in
Visionhealthcare
)
whether omission can be overt act? when there is legal liability only?
(2) Intention
does not need to be predominant purpose (
Lonrho v Shell
)
as
means or end
(
EFT Holdings v Marinteknik
)
targeted or directed
at claimant or a ascertainable class of persons (
EFT Holdings v Marinteknik
where deceit was targeted at bank not subsequent investor even though it was foreseeable)
if class was indeterminate, it would encroach onto negligence and result in tautological reasoning (
Marinteknik
)
-
:red_flag:intent to do injurious conduct, does not need to appreciate unlawful nature (
Multi-Pak Singapore v Intraco
, G Chan supporting)
intent to do unlawful conduct itself -> cannot have intended harm without knowing its unlawfulness (obiter,
Beckkett v Deutsche Bank AG
)
(4) Damage
Lawful means conspiracy
(wrongfulness lies in
concerted action
of conspirators to harm plaintiff
criticised in
Lonrho
and
Panatron v Lee Cheow Lee
but applied in 2014 in
SH Cogent Logistics v Singapore Agro Agricultural
and said to be "too well-established to be discarded" in
Lornho
(both Diplock)
(2) Predominant purpose to injure
purpose distinct from intention
TEST: whether predominant purpose was
legitimate
, e.g. preservation or advancement of self-interest (
Crofter Hand Woven v Harris Tweed
,
Mogul Steamship
, cf
Quinn v Leathem
)
not tortious even if inevitable or foreseeable consequence
severely restricts tort because difficult to prove that there was illegitimate purpose (
SH Cogent
)
Anomalous result
an improper motive can anomalously found a cause of action which, under the principle in
Allen v Flood
, would not lie against an individual
"violation of a legal right committed knowingly is a cause of action"
(Lord Macnaghten considering
Lumley v Gye
, confusing dictum)
(
Quinn v Leathem
in
OBG
)
Proportionality of lawfulness not relevant (e.g. irritating ---- very harmful)
(1) Combination/concerted action
agreement
may be tacit and inferred from overt acts and knowledge of facts founding conspiracy
acted
to further common design
may be company conspiring with its director and agents (but not when acting bona fide within scope of authority) (
Visionhealthone Corp v HD Holdings
)
(3) Proof of damage at large
need not prove appropriate measure of damage or specific damage
Remedies
damages awarded according to reasonable man
injunction
Criminal conspiracy under section 120A
complete once agreement to do illegal act/do legal act with illegal means
need not be actually carried out (unlike civil conspiracy)
:warning:
What is the purpose of the tort?
narrow view: extension of range of defendants liable for civil wrong already independently actionable
broad view: opposition of any combination to perpetrate an unlawful act or purpose (
Total Network
)
-
overlap with tort of joint tortfeasorship? yes some, but two-party unlawful conspiracy may be broader to cover any unlawful means not just actionable tortious wrongs (preference for latter in
Marinteknik
obiter, "
instrumentality
" of illegality ->
causal link
)
Inducing breach of contract v causing loss by unlawful means
secondary v primary
liability
degree of participation
(accessory) v use of
"independently unlawful"
means
breach
of contractual relations v
any damage
e.g. economic expectations
intention to cause breach
(even if no intention to cause harm
South Wales Miners' Federation v Glamorgan Coal Co Ltd
) v
intention to cause damage
(including as means of economic gain)
(
OBG v Allen
)
-
separate torts (
Allen v Flood
, was within
Lumley v Gye
on the facts)
prevention of circularity by separating breach from unlawful means (
OBG
)
deliberation causation of damage "maliciously" not separate ground for damage (
Quinn v Leathem
, Lord Watson;
Allen v Flood
)
malice merely refers to procurement of breach (
Lumley v Gye
)
similarities: both are unlawful ways of carrying on the competition or the dispute (
Mogul Steamship Co Ltd v McGregor Gow & Co
, Bowen LJ, cited by
OBG
) although there is no single principle which makes them unlawful
overlap possible
-
unified theory
criticised in principle and in favour of discarding it for two-tort theory (unified theory (
D C Thomson v Deakin
: extension of
Lumley
to all interference of contractual relations by unlawful means)(or subsuming of
Lumley
under unlawful means (Tony Weir)) (
OBG
)
direct/indirect interference
distinction (
D C Thomson
) criticised as obscuring real question about
whether D's act resulted in sufficient causation to attract accessory liability?
(
OBG
)
Argument for broad "unlawfulness" definition
other control mechanisms: (1) adequate redress by legislation (2) "instrumentality test" to establish causal link (Lord Nicholls,
OBG
) (3) interest protected different? object of rule and interest being harmed
traditional mechanism: independently actionable wrongs