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| || ||Neutral Citation Number:  EWCA Civ 1840|
| || ||Case No: A2/2002/0316 QBENF|
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
| || ||Royal Courts of Justice|
Strand, London, WC2A 2LL
| || ||13th December 2002|
B e f o r e :
LORD JUSTICE BROOKE
LORD JUSTICE TUCKEY
LORD JUSTICE SEDLEY
| || R CRUICKSHANK LIMITED||Appellant/|
| ||and –|
| ||THE CHIEF CONSTABLE OF KENT COUNTY CONSTABULARY||Respondent/Defendant|
Charles Purle QC & Simon Stafford-Michael (instructed by Pini Bingham & Partners) for the Appellant
Andrew Edis QC (instructed by Berrymans Lace Mawer) for the Respondent
Hearing dates : 6-7th November 2002
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Lord Justice Brooke :
- This is an appeal by the claimants R Cruickshank Ltd ("Cruickshank") from an order of Gray J dated 31st January 2002 whereby he directed that summary judgment be entered for the defendant, the Chief Constable of Kent (whom I will call "the Kent police") on the elements of this claim whereby Cruickshank were claiming damages against the Kent police for misfeasance in public office and unlawful interference with contractual relations. It was common ground that the Chief Constable was liable for any torts committed by constables under his control in the performance of their functions (Police Act 1964, s 48(1)). That part of Cruickshank's claim which asserted a claim for damages for conversion in relation to the police's seizure of a single car, which was in Cruickshank's possession at the relevant time, was allowed to proceed to trial.
- Cruickshank is a company whose principal business is the importation and sale of motor vehicles. It was incorporated in March 1998 with an allotted share capital of £50,000 and an issued share capital of £1. Mrs Rita Read is its sole director. The company's turnover for the first 15 months of trading was in excess of £5 million. The moving spirit between the company is Mrs Read's husband Christopher Read, who has been involved in the motor vehicle trade since 1972. It is Cruickshank's case that Mr Read has built up a reputation over the years as a serious dealer with a substantial reputation for honesty and fair dealing.
- Although the present litigation, which was commenced as a public law action on 14th June 2000, is concerned with only 14 motor vehicles, Cruickshank's complaints against Kent police relate to their conduct in relation to most of a consignment of 59 luxury Japanese motor vehicles which they imported from Dubai over a period of about four months from November 1999 onwards. Cruickshank had been introduced to a company called Cantrex which enjoyed trading relationships with two companies in Dubai who were registered motor vehicle dealers. Whether Cruickshank's contracts were with Cantrex or the Dubai companies does not much matter for present purposes. With a single exception all the cars had originally been imported into Dubai from Japan. They were stored in government warehouses in Dubai on their arrival, and they were only released when the Dubai authorities had processed the relevant paperwork.
- Cruickshank are adamant that this transaction was entirely above board. The story of the vehicles following their importation to this country is set out in the Amended Statement of Claim, and they say they had no reason to suspect that anything untoward might have happened until 3rd May 2000.
- In about December 1999 the National Criminal Intelligence Service had issued a warning to police forces about the way in which the importation into this country of stolen cars from Japan had burgeoned in recent months. The number of vehicles brought into this country which were registered as personal imports used to be quite small. It had, however, increased to 55,000 in 1998, and to over 100,000 in 1999. A significant proportion of these vehicles were imported directly or indirectly from Japan. Recent activities by Kent police officers had revealed that two shipments of vehicles imported from Japan via the United Arab Emirates ("UAE") had included substantial numbers of stolen cars, and the Hampshire police had had similar experiences. An investigation in the London metropolitan police area suggested that insurance fraudsters were also at work, because a number of such vehicles were only reported as stolen in Japan after they had been landed in this country.
- On 3rd May 2000 Cruickshank first became aware of the police operation, known as Project Barn, which followed the circulation of this report. They had applied by post for the registration of a car I will call the Prado, and they received a reply to the effect that this car had been reported as stolen, and that Mr Bishop, who is a vehicle examiner attached to the Sussex police, wished to examine it. It appears that the Vehicle Registration Office had conducted a routine check on the Interpol Automatic Search Facility Report System.
- On 9th May Mr Read spoke by telephone to Mr Bishop. Mr Bishop told him that because Cruickshank's place of business was in Kent, he would be referring the matter to the Kent police, who had a specialist Auto Crime unit, based at Dover Docks. On 11th May Cruickshank's solicitors wrote a letter to Mr Bishop in which they set out the history of the Prado, promised him their clients' co-operation in any police inquiries, and enclosed documents relating to the car's purchase, shipment, and licensing in Dubai. They also said:
"Our client is an innocent party in this matter. It bought the vehicle in good faith, has paid for it, and has had to cancel a sale (and return a deposit) in a very difficult market. It has also asked us to convey to you that its losses continue as a result of the vehicle's depreciation."
- Disclosure has not yet taken place, and the Kent police say that this letter did not reach any relevant member of their force until after they had applied for a search warrant on 18th May and had executed it on 22nd May. The warrant permitted them to search Cruickshank's premises for stolen vehicles and for documents in relation to stolen vehicles. The police evidence is to the effect that they obtained their warrant from Dover Magistrates' Court on 18th May, based on the following written grounds of application:
"Premises is the base for a company engaged in the importation of stolen vehicles from Japan. It is unlikely that director will allow access to the premises and documents voluntarily."
Notwithstanding this language the Kent police have always been at pains to stress that on the evidence in their possession Cruickshank was not under investigation for any criminal offence.
- When the police arrived at Cruickshank's premises on 22nd May with their warrant, Mr Read told them that all the documents relating to these vehicles were with the Cruickshank's accountants. They did not in fact search for any documents while they were there. They seized the Prado, however, and they were subsequently to assert that they made this seizure pursuant to their powers under Section 19 of the Police and Criminal Evidence Act 1984 ("PACE"). There was also a car which I will call the Aristo on the premises. A search revealed that this car, too, had been reported as stolen, but while the search was being conducted, the purchaser came and drove it away. Mr Read told the police the purchaser's name and address, and on the same day D/Sgt Keep went to the purchaser's premises in Rye where he seized the Aristo as well. He did not possess a warrant for this purpose.
- The police had asked Mr Read to provide details of all the Japanese cars his company had imported, and on 25th May Cruickshank's solicitors sent them a list of a further 12 vehicles which had been imported and registered in England by their clients. They said that their clients would provide information about the remainder of the vehicles they had imported from Dubai once the police had given them a written undertaking that this information would not be disclosed to relevant Japanese insurers or their agents without their written consent or a court order.
- When the police received this list they had taken positive action in relation to four of the cars on the list by the time Cruickshank initiated these proceedings on 15th June. They seized one car (which I will call the Harrier) from its purchaser, Mr Tang, who lived in their own police area. So far as the other three were concerned, the relevant police force served a notice at their request on the purchaser of each car with the heading: "NOTICE TO INTERESTED PARTIES: STOLEN VEHICLES LEFT IN THE HAND OF CURRENT KEEPER." After identifying the vehicle the notice warned the recipient:
"Please note that you may not be the legal owner of this vehicle even if you have paid for it. If you attempt to dispose of it or any part of it you must inform the prospective new owner of this fact, otherwise you may commit offences under the Theft Act 1968, or render yourself liable to civil proceedings."
The notice also contained a number of different pieces of advice (depending partly on whether the owner of the stolen vehicle had been identified), and ended with an acknowledgment of receipt which the recipient of the notice (who was given two copies of the notice, including one for his/her retention) should send back to an identified police officer.
- In relation to the other eight cars on the initial list Cruickshank maintain that D/C Roberts (of the Kent Police) telephoned their purchasers, who all lived outside Kent, and threatened to take action resulting in the seizure of their cars if they did not sign and return one of these retention notices when it was served on them by their local police force.
- Cruickshank's central complaint against the Kent police is that their activities both before and after the 14th June 2000 have had a disastrous effect on their business. They have identified them as a distributor of stolen cars and thereby seriously damaged their business relationships with their customers. Because the Prado was in their possession at the time it was seized, they have claimed damages for conversion in relation to the seizure of that car. This claim is to proceed to trial. For the rest, they had to seek an alternative cause of action as a route to a remedy for the financial loss they had suffered as a consequence of what they regard as unlawful conduct on the part of the police. A claim for damages for negligence was not open to them (see Hill v Chief Constable of West Yorkshire  AC 53).
- They therefore turned instead to the newly evolving torts of misfeasance in public office and unlawful interference with business interests. The judge struck out their claims under both these heads, and it is the viability of these claims, or either of them, which is at the heart of this appeal. For the purposes of the appeal Cruickshank has proffered for consideration particulars of claim which contain significant amendments from their statement of case before the judge.
- Before considering the ingredients of these two torts I must say something about the relevant provisions of the Theft Act 1968 and of PACE. The warrant granted by a magistrate at Dover on 18th May 2000 was granted under section 26 of the Theft Act. This section provides, so far as is material, that:
"If it is made to appear by information on oath before a justice of the peace that there is reasonable cause to believe that any person has in his custody or possession or on his premises any stolen goods, the justice may grant a warrant to search for and seize the same …"
For this purpose it does not matter where the goods were stolen, provided that the stealing amounted to an offence where and at the time when the goods were stolen (Theft Act 1968 s 24(1)). (It is unnecessary to refer in the context of the present appeal to section 24(3), which prescribes the circumstances in which goods may cease to be regarded as stolen goods, because if these were indeed stolen Japanese cars, none of them were returned to their Japanese owners, and those owners did not cease to have any right to restitution in respect of their theft, before these proceedings commenced).
- Section 19 of PACE, for its part, provides that a constable who is lawfully on any premises:
"(2) … may seize anything which is on the premises if he has reasonable grounds for believing:
(a) that it has been obtained in consequence of the commission of an offence; and
(b) that it is necessary to seize it in order to prevent it being concealed, lost, damaged, altered or destroyed.
(3) … may seize anything which is on the premises if he has reasonable grounds for believing:
(a) that it is evidence in relation to an offence which he is investigating or any other offence; and
(b) that it is necessary to seize it to prevent the evidence being concealed, lost, altered or destroyed."
It is settled law that the word "offence" in this section means a domestic offence (see R (Rottman) v Metropolitan Police Commissioner  UKHL 20 at ,  2 WLR 1315.
- Although the defendant's solicitor referred to the notice I have described in paragraph 11 above as a retention notice under section 6 of PACE, she was probably referring to section 66 of PACE which empowers the Secretary of State to issue the well known codes of practice for the police. Paragraph B: 6: 3 of Code of Practice B states that:
"An officer who decides that it is not appropriate to seize property because of an explanation given by the person holding it, but who has reasonable grounds for believing that it has been obtained in consequence of the commission of an offence by some person, shall inform the holder of his suspicions and shall explain that, if he disposes of the property, he may be liable to civil or criminal proceedings."
Mr Edis QC, who appeared for the defendant, did not attempt to argue that the conditions set out in the code were satisfied before these notices were served on Cruickshank's customers.
- The evidence before the court suggests that the Kent police had a settled policy of seizing any cars in the county of Kent which they had reasonable grounds to believe to be stolen. D/C Roberts, who played a prominent role in these police activities, has explained in a witness statement that it has been his experience that if he merely serves what he called "a retention notice under PACE", 60% of these cars will then disappear, never to be seen again. Kent has made appropriate arrangements for storing stolen cars. He says that it is largely because of financial considerations associated with the cost of storage that other police forces do not follow the same policy. In Kent the police were not willing to accept an undertaking by the possessor of a suspect car, however respectable, that he/she would not dispose of the car and would release it to its original owners' insurers, if so requested. A solicitor's undertaking, however, would have been acceptable.
- On 26th May 2000 Mr Gareth Davies, who is a solicitor for the Kent police, is reported as having told Cruickshank's solicitor that PACE authorised the Kent police to seize these cars as evidence of a crime. On 1st June 2000 another employee in the Kent police solicitor's department, Beverley Carter, relied on the decision of the House of Lords in National Employers' Mutual General Insurance Association Ltd  1 AC 24 as authority for the proposition that an innocent purchaser of a stolen vehicle did not obtain good title as against its original owner.
- This was a decision of an English court on the proper interpretation of section 9 of the Factors Act 1889. Cruickshank, for their part, have adduced evidence of features of the laws of Japan and Dubai which tend to show that although the owner of a stolen car will retain title to the car, he/she can only recover it from an innocent purchaser for value if he/she pays the purchaser the price paid by the purchaser for the car (see Articles 192-194 of the Civil Code of Japan, which provides that such restitution is permissible within two years of the date of the theft, and Article 1326(2) of the UAE Civil Code). Reimbursement of the purchase price is required if the purchase in question was made in good faith at an auction or in a public market, or as a trade purchase of the type described in those two codes.
- An important part of Cruickshank's case is based on the undisputed proposition that the Kent police's Auto Crime Unit was a unit staffed by experienced police officers who had been provided with additional training to help them perform their functions. The purpose of this training was to facilitate their understanding of all the documentation involved in the importation, registration and buying and selling of foreign motor vehicles.
- Cruickshank say that these officers would have received training on the legal issues commonly involved in investigations of this kind, and that they would have been given instructions to seek legal advice in appropriate circumstances. In particular, they say that the officers were either deemed to know, or were under a duty to have taken legal advice on, the extent to which English domestic law would apply to the purchase of motor vehicles abroad. In Winkworth v Christie Manson and Woods Ltd  1 Ch 498 Slade J has made it clear that, as a general rule, the validity of a transfer of movables is governed by the lex situs and that if under that law the transferee acquires a valid title the English court will recognise it.
- In formulating their case on misfeasance in public office Cruickshank went even further. They claim that the representative of the Kent police's solicitor's department, Beverly Carter, and/or the relevant police officers (including in particular D/S Keep and D/C Roberts) knew, or ought reasonably to have known, at any rate after 1st June 2000, of the effect of English law generally and in particular the legal effect of the principles set out by Slade J in the Winkworth case. If they did not actually know these matters, Cruickshank maintain they were acting with reckless indifference to the extent that they did not make enquiry to ascertain the true position.
- Cruickshank have set out the governing principles of English law in Paragraph 54 of the Draft Amended Statement of Claim:
"(1) The relevant law governing the proprietary effects of assignments of chattels is the law of the place where the assignment of the chose in possession takes place.
(2) In civil law jurisdictions sales of stolen goods to innocent purchasers are and/or can be effective.
(3) In so far as may be different from 2 above, under civil law systems the assignment of choses in possession of tangible movables to a bona fide purchaser for value without notice (or some near equivalent) is effective to give the purchaser good title against all persons including the original owner.
(4) English law generally recognises the validity of such assignments where original owners (or anyone else) sought to recover possession of the movable when subsequent to such an assignment it was brought into the jurisdiction of the English courts."
- Cruickshank's claims for damages for unlawful interference in contractual relations and for misfeasance in public office relate to the losses they suffered from the activities of the Kent police in seizing their customers' cars or in causing retention notices to be served on those customers or in threatening them with the seizure of their cars if they did not sign retention notices. The matters on which they rely can be divided up under the following headings:
(1) The effect of their solicitors' letter dated 11th May 2000;
(2) The unlawfulness of the seizure of the Aristo;
(3) The effect of their solicitors' letter dated 25th May 2000;
(4) The unlawfulness of the seizure of the Harrier;
(5) The unlawfulness of the service of the retention notices;
(6) The unlawfulness of the threats to the purchasers of the other cars on the initial list.
- So far as the first of these claims is concerned, it is formulated in paragraph 54B of the Draft Amended Particulars of Claim in these terms:
"The Defendant's servants or agents DC Roberts and DS Keep deliberately seized [the Aristo and the Harrier] knowing that there were no grounds to do so or being recklessly indifferent as to whether or not there were any such grounds. DC Roberts deliberately threatened the seizure of the other vehicles knowing that there were no grounds to do so or being recklessly indifferent as to whether or not there were any such grounds unless the keepers submitted to the terms of the retention notice.
It is the Claimant's case that
1. The Defendant through his servants and agents deliberately used unlawful means to interfere with the contractual relations existing between the Claimant and its trade or consumer clients.
2. The necessary and intended consequence of such conduct was to cause loss and damage to the business and goodwill of the Claimant in particular by exposing them to claims at the suit of their own customers and other loss of business as hereinafter particularised."
- As to the second of these claims Cruickshank have formulated their statement of case according to the principles set out by the House of Lords in Three Rivers District Council v Governor and Company of the Bank of England (No 3)  2 WLR 1220. Paragraph 56 of the Draft Amended Particulars of Claim is in these terms:
"The servants or agents of the Defendant hold a public office, namely that of constable. The Defendant who is also a public officer holder is vicariously liable for the conduct of his servants or agents. His servants or agents in the purported discharge of their functions and exercise of their powers were reckless in that such conduct was unlawful and undertaken in bad faith with a reckless disregard as to the lawfulness of their actions (including threatened actions) and/or with reckless indifference as to the truth and to the effect their actions or representations and oppressive exercise of or threat to exercise powers of seizure would have on the Claimant's business and its goodwill."
- Cruickshank's case is all about the abuse of police power. They say that the police have used their powers unlawfully to their economic detriment. Unlike private citizens, public officers like the police have public duties to perform and they are given powers in order to help them to perform those duties. If they abuse their powers they may be liable for misfeasance in public office. In the Three Rivers case Lord Steyn explained at p 1231 that this tort may take two forms. It may take the form of targeted malice by a public officer. This form of the tort involves bad faith in the sense of the exercise of public power for an improper or ulterior motive. This is not suggested in the present case. Alternatively the tort may be committed when a public officer acts in the knowledge that he has no power to do the act complained of, and that the act will probably injure the claimant. This involves bad faith, too, inasmuch as he does not have an honest belief that his act is lawful.
- Lord Steyn explained that in its second form it is not necessary in every case to prove that the public officer knew that he was acting in excess of the powers granted to him and that his act was likely to cause damage to an individual or individuals. What the law describes as subjective recklessness may suffice. What Lord Steyn said about recklessness at p 232 may be summarised in these terms:
(1) If public officers, such as the police, are not making an honest attempt to perform their duties they are abusing their power and acting in bad faith;
(2) It does not matter for this purpose whether they are deliberately seeking to injure someone or whether they are being recklessly indifferent as to the consequences of their actions on him: each state of mind is equally blameworthy.
- In my judgment Cruickshank's attempt to formulate an alternative claim for unlawful interference with contractual relations was completely hopeless. In Lonhro plc v Fayed  2 QB 479 Dillon LJ, in a judgment with which Ralph Gibson and Woolf LJJ agreed, said at p 489D that the unlawful act in question must have been in some sense directed against the claimant or intended to harm the claimant, although this need not have been the predominant intention. In Tort Law, by BS Markesinis and SF Deakin (Fourth Edition) the authors put the position like this:
"It is necessary to show that the defendant had an 'intent to injure' the claimant, or that he was 'aiming at him' as the object of the economic pressure he was seeking to inflict … … [W]ith causing loss by unlawful means, [the defendant] must intend to inflict economic damage on the plaintiff as such."
- Cruickshank's advisers paid attention to this necessary ingredient of the tort when they included in paragraph 54B the somewhat surprising contention that the intended consequence of the Kent police's unlawful conduct was to cause loss or damage to Cuickshank's business and goodwill. If they had any reasonable prospect of proving this – and in my judgment they do not – then all the elements of the first form of liability for misfeasance in public office would be present. When Cruickshank come to rely on that tort, however, they rely only on recklessness and not on targeted misconduct.
- In my judgment, considerations like these go to show how in matters of this kind, where public officers do not merely possess relevant powers but also have duties to perform in the public interest, it is to the evolving tort of misfeasance in public office that one needs to turn when an abuse of those powers is alleged. In argument Mr Purle QC, who appeared for Cruickshank, contended that he was entitled to rely as against a public officer on the tort of unlawful interference with a claimant's trade or business, and that in that context he did not even have to prove recklessness or an intention to inflict economic damage. For the last of these submissions he relied on a passage in the judgment of Woolf LJ in Lonrho v Fayed at p 404 in which it was suggested that the tort would be complete if a defendant:
(i) did an unlawful act (such as deceiving a third party)
(ii) knowing that this act would have an undesirable economic consequence to the claimant, and
(iii) having decided to pursue that act knowing what the consequences would be.
Compare, in the context of the criminal law, R v Woollin  1 AC 82, 87G-H and 95A.
- In my judgment, if the facts of a case warrant a claim against a public officer that he acted with targeted malice, then it is within the four corners of that tort that considerations like these might arise, if at all. In my view it is wholly inadmissible to water down the requirements of the tort of misfeasance of public office by reference to an economic tort which is not in any way concerned with the conduct of public officers who have public duties which they must perform: for them, actions which may cause foreseeable economic harm to a person affected by them may be a matter of duty and not simply a matter of choice.
- I turn therefore to the matters on which Cruickshank rely in support of their misfeasance claim. They start by relying on their solicitors' original letter dated 11th May 2000 (see para 7 above) because it told the police everything they needed to know about the Prado, offered their co-operation to the police, explained their bona fides, and warned the police of the losses they might suffer if the status of the Prado was not cleared up in the near future.
- They then rely on matters concerned with the obtaining and execution of the warrant (although these are primarily linked with the conversion claim which is proceeding to trial), because they say they reflect the recklessness with which they say the Auto Crime Unit operated in this matter. They say that the warrant the police obtained on 18th May was invalid because the relevant police officers knew that the statement in the written information (see para 9 above) was misleading and/or untrue. The cars were being imported from Dubai, not Japan, and this statement implied impropriety on their behalf and/or a belief of such impropriety when there were no or no reasonable grounds for such belief. They also contend that the police knew or ought reasonably to have known that all the imported vehicles in their possession constituted their stock and were intended for sale in the ordinary course of their business, and that these were material facts which ought to have been disclosed to the magistrate when the warrant was applied for.
- Cruickshank also complain that section 26 of the Theft Act contains no power to search for documents (other than documents reasonably believed to be stolen), as the Administrative Court was later to observe. Nevertheless the Kent police sought and obtained a warrant authorising them to exercise such power (although they did not in fact use it: see para 9 above).
- They then say that the seizure of the Prado was unlawful because the warrant whereby the police entered their premises and seized it was invalid (for the reasons set out in paras 35 and 36 above). They also say that there was no genuine exercise by the police of any discretion under section 19 of PACE. In this respect the police were acting under their blanket policy "if you find stolen vehicles, seize them", and were relying on their general experience that stolen cars tended to disappear if they were not seized. They did not have reasonable grounds for believing that the Prado had been obtained in consequence of an offence, or that it was evidence in relation to an offence they were investigating, or that it was necessary to seize it in order to prevent it being concealed, lost, damaged, altered or destroyed. The requirements of section 19 of PACE (for which see para 16 above) were therefore not fulfilled, and in any event there was no evidence that the police were investigating an offence committed in this country, as opposed to Japan. (To this final complaint Mr Edis riposted, with a good deal of justification, that it had never appeared in Cruickshank's pleaded case, and that if it had, this would have given his clients the opportunity of referring to possible offences connected with the importation of stolen cars.)
- Cruickshank also complain that the Interpol report could only have given rise to a suspicion that the Prado might have been stolen, and not to reasonable grounds for belief that it was in fact stolen. In this context they refer to the NCIS's mention of insurance fraud, and to the fact that the Prado was recorded as having been stolen two weeks after it arrived in this country. (The police were to allege that this was a computer error.)
- Cruickshank rely on their solicitors' letter dated 25th May (see para 10 above) because it indicated to the police that this was not a straightforward case within a dimension that was exclusively English. Their solicitors had observed that since no allegation of a criminal offence was being made against their clients, the disputes that had arisen or would arise (in so far as they concerned them) were of a purely civil nature as to title of the vehicles. The civil disputes would be extremely complex. Japanese law would have to be considered if Japanese insurers were claiming a legal right, and if they were claiming an equitable right, consideration would have to be given to the extraordinary delay that had occurred. They said that counsel had given them very strong advice to the effect that PACE did not give the police powers to seize and impound all vehicles suspected of having been stolen in these circumstances, in the absence of very clear evidence of the title claimed by the insurers. They warned the police that if they proceeded in the way they intended, their clients would suffer possibly disastrous economic consequences such as to put their very existence into serious doubt.
- Since it was this letter which identified the cars covered by this claim (other than the Prado and the Aristo, which had already been seized) Cruickshank complain that the other actions by the police (the seizure of the Harrier, the service of the retention notices and the telephoned threats to their other customers) were performed recklessly, in that they did not bother to check up on the true state of the law in a complex case with an international flavour, but by their in-house solicitor were content to rely on propositions of English statute and case law which did not possess this international dimension.
- I am not surprised that the judge struck out the claim relating to misfeasance in public office, because the statement of case, as it then stood, possessed a number of inherent inadequacies. When Potter LJ granted permission to appeal, he did so because he considered that the case raised complicated issues in a difficult area of the law, and it seemed to him to be arguable that they were not appropriate to be dealt with on a summary basis, at any rate with the appellants not being given an opportunity to amend. He strongly advised them to consider making amendments to their particulars of claim, and we are deciding this appeal on the basis of those amendments.
- With a good deal of hesitation I have come to the conclusion that the claim for damages for misfeasance in public office should be allowed to go forward to trial. I have considered the evidence filed by the police, and it seems to me that Cruickshank may face substantial difficulties in proving their case. But what will be in issue at the end of the day will be the state of mind of the servants or agents of the Chief Constable, and this is a matter which cannot be resolved in a summary way. Disclosure has not yet taken place: indeed the police are in breach of an order for disclosure. For all the court knows at present, the police may have been carefully taught about the law's complications when cars allegedly stolen in a foreign jurisdiction are the subject matter of an investigation in this country.
- These complications increase when a subsequent transfer of title to the cars occurs in a third jurisdiction. If the police did receive such training, then the blind eye they turned to the complexities of the case, particularly after receipt of the letters dated 11th and 25th May, might be taken by a judge to connote recklessness. Those letters certainly gave the police clear notice of the potentially disastrous financial consequences their actions might cause to Cruickshank.
- In the end the police evidence shows that they simply acted as intermediaries between the Japanese insurers (when they appeared on the scene) and the ultimate English purchasers of the cars. As a rule the Japanese insurers were content to drop their claim for restitution if there was no great police interest in a prosecution, in the light of their reluctance to pay the sums required by Japanese law if they were to recover possession of the cars from their "innocent" English purchasers.
- Our attention was drawn to the second decision of the House of Lords in the Three Rivers case (reported at  UKHL/16,  2 All ER 513), in which the House by a 3-2 majority resolved that that highly complex action should proceed to trial. The passage of Lord Hope's speech at paras 87 to 100 has particular resonance in the present context. All these cases are different, but in the end I have concluded that Cruickshank should have the opportunity of taking this case to trial, rather than see the issues they seek to raise determined against them in a "mini-trial on the documents without discovery and without oral evidence" (see Lord Hope at para 95). In other words, this is not a case which is "not fit for trial at all".
- I would therefore allow the appeal and allow the amendments of the Particulars of Claim to the extent that the claim for damages for misfeasance in public office should be restored. The claim for damages for "interference with contractual relations" should remain struck out.
Lord Justice Tuckey:
- I agree that the claim for misfeasance in public office should be restored and that the claim for interference with contractual relations should remain struck out. I also agree with Sedley LJ's reasons for rejecting the argument that a claim for interference with contractual relations does not lie against public officials.
Lord Justice Sedley:
- I agree with the judgment of Brooke LJ both as to the viability of the amended claim for misfeasance in public office, despite the probable difficulties of proof, and as to the non-viability of the pleaded claim for interference with contractual relations. But Mr Andrew Edis QC for the chief constable placed in the forefront of his submissions on the latter cause of action a bold argument which deserves separate attention.
- Mr Edis's principal submission was that interference with contractual relations is a tort which in law does not or should not lie against public officials. There is, as he accepts, no authority on the point. But he contends that the now developed law of misfeasance in public office is exhaustive of the liabilities which should attach to individuals acting, or purporting to act, in a public capacity. It would not mean that, absent bad faith, officials were immune from suit regardless of what harm their acts did: any civil wrong which they committed by exceeding their authority, for example trespass to property or to the person, would still be actionable. But the derivative or secondary tort of knowingly adopting such unlawful means in order to do economic harm would be unavailable against public officials.
- Mr Purle points out that the unlawful means which can constitute interference with contractual relations go wider than actionable torts: see Acrow (Automation) ltd v Rex Chainbelt Inc  1 WLR 1676, CA. But the real objection to Mr Edis's proposition is in my view much more fundamental than this. The law of England and Wales knows no separate concept of the state. As Dicey famously said,
"Any official who exceeds the authority given to him by the law incurs the common responsibility for his wrongful act; he is amenable to the authority of the ordinary courts …" (Introduction to the Study of the Law of the Constitution, 10th ed., p.389).
Dicey, it is true, was principally concerned to draw a distinction now accepted as being largely false between the common law system and French droit administratif (see Wade and Forsyth, Administrative Law, 8th ed., 23-5). He also chose to ignore the fact that by his time the courts of England and Wales had themselves developed a sophisticated body of public law. But his essential point holds good: the courts recognise and give effect to powers conferred by law for public purposes on individuals or bodies, but they also draw the limits of such powers and make office holders accountable like anyone else for wrongs done in excess of their powers.
- Mr Edis's proposition would change all that. It would mean that where a private individual can be sued for deliberately using unlawful means to interfere with contractual relations, a public official (ex hypothesi abusing his or her power) could not. This is not to say that the situation is unproblematic. The present state of the law, in particular the combination of the doctrine that people are initially presumed to intend the ordinary consequences of their acts with the principles that intention to injure does not have to be a dominant motive and that bad faith is not needed, makes the tort of interference with contractual relations relatively easy to assert. Many official decisions are taken in the knowledge that they are going to do someone economic harm, and it may seem harsh that if they turn out to be unlawful, which can happen quite innocently, they may give rise to a claim for economic loss. It is harsh not only on official bodies which may find themselves sued for damages but on all the other people predictably harmed by unlawful official decisions but unable, because the decision has not interfered with any contract, to claim damages for it. In a civil law system such decisions, at least if there is faute lourde, generally carry compensation as of right; but it is otherwise in common law systems in the absence of a statutory right (which may today be afforded by the Human Rights Act 1998) to damages.
- Such inconsistency is one of the negative consequences of the incremental and reactive development of law; but it cannot be resolved by the creation out of nothing of a state immunity in defiance of one of the most fundamental tenets of our constitutional law.
- In practice it will be perfectly possible for an official who has acted honestly, albeit mistakenly in law, to establish that it was no part of his or her intention to harm the claimant, even though it was evident that harm would result. The essence of the wrong is mischievous, not accidental or incidental, interference with somebody else's contract, and in the great majority of cases – including this one – a claim against the state will founder on the want of any evidence of malign intent. To the extent that tort law has been moving towards a larger tort of wrongful interference with economic interests, the same factual reservations will ordinarily protect public officials without resort to special doctrines of law. In all but extreme cases, of which this is not one, the tort of misfeasance in public office will afford any remedy which may be due for the abuse of public power.
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