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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Mainstream Properties Ltd v Young & Ors [2005] EWCA Civ 861 (13 July 2005) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2005/861.html Cite as: [2005] EWCA Civ 861, [2005] IRLR 964 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
HIS HONOUR JUDGE NORRIS QC
Strand, London, WC2A 2LL |
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B e f o r e :
LADY JUSTICE ARDEN
and
MR JUSTICE AIKENS
____________________
MAINSTREAM PROPERTIES LTD |
Appellant |
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- and - |
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YOUNG & OTHERS |
Respondent |
____________________
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mark Lomas QC (instructed by Leigh Davis & Co) for the Respondent
____________________
Crown Copyright ©
Lady Justice Arden :
"(g) Mr De Winter was a very careful witness, though it was not easy to assess whether the care with which questions were answered arose from a desire to tell the exact and considered truth, or from a desire to assess where the answer fitted in the overall evidence and its implications for his own position. In the end I assessed him as an honest (if calculating) witness who essentially told me the truth (if not the whole truth) as he recollected it. One feature of his evidence was the development of its detail (as the case against Mr Young and Mr Broad progressed); I have felt unable to rely on significant parts of this developed detail unless supported by documents or evidence from Mr Young that I considered was trustworthy."
" 51. My finding as to Mr De Winter's involvement in Rangemoor are these. On 23 March 2000 (during the working day) Mr Young and Mr Broad went down to Mr De Winter's business premises in London. They discussed the Rangemoor project. Mr De Winter was to buy the land, Homes would do the development – an evolution of the arrangement that Mr De Winter had with Mr Broad. Mr Young and Mr Broad had prepared documents headed "brief appraisal" setting out the costings and likely profit, showing a margin of 24%. They had also prepared a cash flow projection and the schedule setting out all legitimate charges and expenses. They took with them plans that had been prepared for the development. There were detailed discussions. Following that, on 4 April 2000, Mr De Winter had sent a fax to Mr Young and Mr Broad outlining the risks involved. I regard it as probable that there were then further detailed discussions. On 18 May 2000 Mr De Winter sent a detailed letter containing a detailed funding proposal. This gave Mr De Winter 11% interest on his investment, plus the first £225,000 of any profit, plus 50% of the profits over £450,000. Mr Young and Mr Broad agreed these terms (though at trial neither was very clear what they had let themselves in for). Mr Young, Mr Broad and Mr De Winter all said that there was not really anything else in the way of documents on the Rangemoor development, and that the matter proceeded on the basis of an exceptional level of trust. But I do not consider that I was told the whole truth, and I find that the probability is that there was some written record of the course of the dealings between Mr De Winter and Homes. There are two bases for that finding. First, the probability is that there was a detailed written record of how much was drawn, and when, and for what (since otherwise Mr De Winter's profit share could not be calculated). Second, an entry in Mr Broad's diary referring to a letter to Mr De Winter led to the production (in the course of the trial) of such a letter. It did not match up to the diary entry. But it demonstrated a degree of formality in the relationship, the exchange of financial documents, and the copying of solicitors' correspondence. I therefore find that the arrangement between Mr Young and Mr Broad on the one side and Mr De Winter on the other, whilst in some respects informal, was an arm's length business relationship, the terms of which were formally recorded and the course of which was charted in correspondence and financial documents. It was supplemented by meetings (three or four of which took place at Mainstream's offices) and site visits by Mr De Winter, and by regular telephone calls at the end of each month (when the "draw down" against the schedule expenditure would be considered). "
52. Mr De Winter told me in his evidence what he knew of the circumstances in which the Rangemoor arrangements were made. He told that he knew Mr Broad was Development Director of Mainstream, that he knew Mr Young was a Director of Mainstream, and that Mr Moriarty was the Senior (probably Managing) Director. He was aware that Mainstream bought development sites. He agreed that there was an obvious conflict between Mr Broad and Mr Young acting for Mainstream and in their acting for themselves in the Rangemoor development: and that he certainly realised this. However, he understood that the Rangemoor development had been turned down by Mainstream, and on that basis he proceeded with his relationship with Mr Young and Mr Broad. In his witness statement of May 2003 (though not in either his August or September 2002 witness statements) Mr De Winter said:
"I wish to make it clear that I specifically said to Mr Broad that I would only agree to fund the project provided that there was no conflict of interest with regard to his and Mr Young's employment at [Mainstream]. Mr Broad confirmed to me that there was no question of a conflict of interest and I trusted his reply and was therefore happy to proceed."
In cross examination he confirmed this saying:
"I would use the expression "conflict of interest" from time to time. I would not take something from somebody whose right it was. I wanted them to be free to do something with me: and to be sure that they had the capability. If I had to share men it would inhibit their work and mine."
I have considered the stage at which this evidence about "conflict of interest" emerged: and I have weighed what was said in the witness statements with what was said from the witness box. I have concluded (because of the manner in which the last quoted answer was given) that I can accept Mr De Winter's evidence as to specifically raising the "conflict of interest" issue, and as to receiving the reply he did. I accept that it was on that basis that he proceeded with Rangemoor. That concludes the relevant findings of fact on Rangemoor: and I can at last turn to the central issue."
" 108. As I have recorded in relation to Rangemoor, at the time of entering this commitment Mr De Winter knew exactly what Mr Broad and Mr Young did as officers and employees of Mainstream, and knew of Mr Moriarty's interest. At the time when Mr De Winter committed himself to fund the Findern development, so enabling Mr Young and Mr Broad to resume the detailed contractual negotiations that would lead to settlement of the contract terms within days, the potential for conflict between duty to Mainstream and personal interest on the part of Mr Young and Mr Broad was obvious to Mr De Winter as it was in relation to the Rangemoor project. He says that he expressly addressed the issue and received the assurance from Mr Young and Mr Broad that there was no conflict because the site had been offered to and reject to Mainstream."
109. The way in which this evidence emerged was not entirely satisfactory. It did not feature at all in either of Mr De Winter's first two witness statements: it did feature in his third witness statement of 15 May 2003, and prominently at trial. In the former Mr De Winter firmly placed the discussion about conflict as occurring in a conversation that took place after the dismissal of Mr Young and Mr Broad. Mr Randall QC drew attention to these features of Mr De Winter's evidence and to inadequacies in the evidence of Mr Broad and Mr Young on this topic (with which it is unnecessary to burden this judgment). The stark issue for me is whether this alleged conversation about "conflict" is a fabrication or is an honest (if perhaps muddled) recollection. I regard it as the latter, and find that there was a conversation at some point at which Mr De Winter sought assurance from Mr Young and Mr Broad that the proposed venture did not conflict with their duties to Mainstream. The potential for conflict was obvious and (is admitted to be so by Mr De Winter). The question is therefore whether it is probable whether Mr De Winter ploughed ahead deliberately running the risk because only an initial investment of £25,000 was required, or whether he sought some assurance. It is plain from the way he gave his evidence that Mr De Winter is not an incautious man. He had nothing to lose by asking the question. Unlike Mr Young and Mr Broad, he had no pressing need to make an investment in this site. I believe him when he said to me:
"I would not take something from somebody whose right it was. I wanted them to be free to do something with me; and to be sure they had the capability. If it had to share men it would inhibit their work and mine".
110. I also find that when Mr De Winter raised the issue he received the assurance from Mr Young and Mr Broad that there was no conflict (even though this was untrue and both of them knew that if they had sought permission from Mr Moriarty it would have been refused). The reason they gave was that the site had been offered to and rejected by Mainstream (which was not the truth). They probably also gave as the reason for Mainstream's rejection the suggestion that Mainstream could not afford to purchase the site (although this was not the position in March).
111. I further find that Mr De Winter accepted and relied on the answers given to his questions. Mr Randall QC commented that you do not ask the burglar carrying the television set down the garden path whether it really belongs to him, because you will only get one answer. He submitted that I should be wary of accepting Mr De Winter's evidence that he genuinely believed Mr Young and Mr Broad. But whether the belief was actually held and whether it was reasonably held are two different questions. Mr Lomas QC was able to point to a context that (coupled with my own estimate of Mr De Winter as a witness) is sufficient to persuade me to find that Mr De Winter genuinely accepted and relied on the answers he was given. He had been told the same about Rangemoor; and that development was now proceeding smoothly without objection. The story that Mainstream was desperately short of funds gained apparent support from the puzzling approach for a loan in December 2000. Mr De Winter had openly visited Mainstream's offices in connection with the Rangemoor development and was unaware of the level of concealment. Mr Lomas QC submits (and I accept) that these features prevent the inference being drawn that (notwithstanding what Mr De Winter may now say in his own interest) he must have known that Mr Young and Mr Broad were acting in breach of obligation."
"121. Mr Lomas QC submits that actual knowledge of the contract is required (and constructive knowledge is insufficient) because an actual intention to break the contract is required (and a constructive intention is insufficient). I am therefore concerned with what Mr De Winter actually knew and intended with regard to the employment contracts, or alternatively what he must by compelling inference be taken to have known and intended; I am not concerned with what a reasonable man, placed as Mr De Winter was placed, ought to have known or may be though to have intended.
122. To these submissions Mainstream's answer was that people are presumed to intend the reasonable consequences of their actions (see Greig v Insole (supra) at 3388 A) and that a person can intend a consequence if he knows that it will follow from a course of conduct on which he embarks deliberately, so that a consequence cannot properly be regarded as "unintended" if the deliberate action is taken knowing that it must inevitably bring about the consequence: see Millar v Bassey at p 4 of the Lexis transcript. But I do not consider that either of these passages (or the principle they embody) is inconsistent with the submissions of Mr Lomas QC. They are but an illustration of the alternative form of the submission (where inferences are to be drawn from the proven facts).
123. I accept the submissions of Mr Lomas QC. I have found that Mr De Winter knew sufficient of the contracts to spot the conflict problem. I have found that he raised the conflict issue. I have found that he genuinely believed that the participation of Mr Young and Mr Broad in the Findern venture would not occasion a conflict between their duty and their interest. What a reasonable man ought to have known or done or intended is not relevant. The tort is one of deliberately inducing breach of contract: not carelessly or negligently inducing such a breach. It follows that I must hold that Mainstream has not established that Mr De Winter intended to procure a breach of or to interfere with the performance of the employment contracts. It follows that I dismiss the claim against Mr De Winter."
The appellant's submissions
"Good faith as such is no defence if knowledge and intention are proved [Pritchard v Briggs, Greig v Insole]. If the defendant is in "honest doubt", he may escape liability, but only where that doubt goes over to the existence of the contract, not to "the legal result of known facts". [Solihull v NUT, Pritcharrd v Briggs and other authorities]".
At paragraph 24-24, Clerk and Lindsell state:
"Inferred intention. Intention imports no desire to injure but it is sufficient that there is deliberate conduct by a defendant who appreciates, or is sufficiently reckless in regard to, the probable consequences on the plaintiff. Where knowledge of the existence of a contract is proved on the part of a defendant who induces one party to break it, his intention to do damage to the other party is readily inferred. Belief that the contracts are not enforceable or, a fortiori, indifference whether breach will be caused by the inducement does not excuse the defendant. It has therefore become very difficult to escape liability on the ground that knowledge or intention are absent, if the action of the defendant could be expected to induce a breach of a contract of which he is or must be or can easily be made aware, for example where he interferes with business relationships."
i) directly inducing, or procuring, a party to a contract to break it.
ii) indirectly inducing or procuring a breach of contract by the use of unlawful means.
iii) deliberate and direct interference with a contractual relationship or the prevention or hindrance of execution, or the wrongful interference with the business.
iv) unlawful means conspiracy.
v) conspiracy to injure.
Mr Randall submits that the claimant does not have to show that the interference was aimed at him, except in the case of tort (ii) and possibly tort (iv).
"[38] In order to find liability [for inference with contractual relations], a plaintiff must demonstrate that the defendant had an "intent" to induce the breach of contract. The intent component of the tort is the most difficult to understand. Malicious motive, unlawful conduct, hatred or intention to harm are not required elements of intent: Allen v Flood, [1898] A.C.1 9H.L.(E,));Parks West Mall Ltd v Jennett (1996), 36 Alta.L.R. (3d) 44 (C.A.) at 49; and Atcheson v College of Physicians and Surgeons (Alberta), [1994] 6 W.W.R. 239 (Alta.Q.B) at 246. However, what is required is less clear. The requisite intent has been described with "loose, vague and conflicting statements" that sometime appear to be irreconcilable: Ed Miller Sales, supra, at 230.
[39] Originally, the tort required the breach to be the result of wilful, deliberate and direct conduct which the defendant knew or hoped would result in a violation of the plaintiff's contractual rights. See for example, Lumley v Gye (1853), 118 ER 749, 2 El. & B1.216 (Q.B); and Quinn v Leathem, [1901] A.C.495 (H.L.(I.)).
[40] However, courts soon recognized that intent can also be inferred when the consequences of the conduct were a necessary or reasonable foreseeable result, because "people are presumed to intend the reasonable consequences of their acts": South Wales Miners' Federation v Glamorgan Coal Company, [1905]A.C.239 (H.L.(E.)) at 244. In Posluns v Toronto Stock Exchange and Gardiner (1965), 46 D.L.R. (2d) 210 (Ont. H.C) at 267; affirmed (1966), 53 D.L.R (2d) 193 (C.A.); affirmed [1968] S.C.R. 330, 67 D.L.R. (2d) 165, the court held that liability would attach if the defendant's conduct resulted in the breach of a contract "of which it was or ought to have been aware". The intention to bring about a breach of contract need not be the primary object; it is sufficient if the interference is necessarily incidental to attaining the defendant's primary objective: Fraser v Board of Trustees of Central United Church (1983), 38 O.R. (2d) 97 (H.C.J.) at 103' and Bank of Nova Scotia v Gaudreau (1985), 48 O.R. (2d) 478 (H.C.J.).
[41] Intention can also be established when the defendant was reckless or wilfully blind to a breach. The defendant need not have actually known the precise terms of the contract or that his object only could be accomplished through breach of the contract. "If – turning a blind eye – he went about it regardless of whether it would involve a breach, he will be treated just as if he had knowingly procured it": J.G. Fleming, The Law of Torts, 8th Ed. (Sydney: law Book Co., 1992) at 694.
[42] Turning a blind eye may include situations in which the defendant failed to seek advice or employ the means available to obtain the necessary knowledge. For example, in Royal Bank of Canada v Wilton (1995), 165 A.R. 261, D.L.R. (4th) 266 (C.A.), the defendant was uncertain about the enforceability of a contract, had the "means of knowledge" to determine if a legitimate contract existed, but made no efforts to seek advice. This court found the defendant liable because he deliberately chose not to acquire the information, but proceeded on the basis that the contract was unenforceable. Similarly, when there are competing legal interpretations and the defendant adopts an interpretation which will interfere with the plaintiff's rights, the defendant "must at least show that he was advised and honestly believed that he was legally entitled to take that course": Swiss Bank v Lloyds Bank, [1979] Ch.548 at 580 (CH.D.); reversed on other grounds [1982] A.C. 584 (C.A.); affirmed [1982] A.C. 604 (H.L.(E)).
[43] If the defendant acted under a bona fide belief that contractual rights would not be infringed, liability will not be found even though the belief turned out to be mistaken. But for a mistaken belief to be bona fide, rather than the result of recklessness or wilful blindness, some basis for the belief must exist, and some reasonable effort must have been made by the defendant to learn the truth. In British Industrial Plastics Ltd. v Ferguson, [1940] 1 All E.R. 479 (H.L.(E.)), the defendants who had made the effort to seek advice were not found liable even though their belief was described as "illogical". In Z-Mark International Inc. v Leng Novak Inc. (1996), 12 O.T.C. 33 (Gen. Div.), appeal dismissed (1999), 122 O.A.C. 341, a defendant made inquiries and obtained assurances and a warranty. The court found that the defendant had no reason to doubt the assurance or the warranty and therefore the defendant was not knowingly or recklessly indifferent to a breach of contract.
[44] In some cases a distinction is drawn between direct interference, for which the breach must be foreseeable or reasonable consequence of the conduct, and indirect interference, for which the breach must be necessary or substantially certain consequence. See, for example, L.N. Klar, Tort Law, 2nd ed. (Scarborough: Carswell, 1996) at 498 and 507; Fleming, supra, at 694; D.C. Thomson & Co. Ltd. V Deakin ,[1952] Ch 646 (C.A.); Bank of Nova Scotia, supra; Garry v Sherritt Gordon Mines Ltd., [1988] 1 W.W.R. 289, 45 D.L.R. (4d) 22 (Sask. C.A.); and Atcheson, supra.
[45] As this case involves direct interference, this distinction does not arise. Pocklington, as the director of Gainers, executed the documents to complete the transfer of the 350151 shares to his own company. The transfer caused Gainers to breach s. 12.03(1) of the Master Agreement, which prohibited dispositions of assets without Alberta's consent. Therefore, if the breach was a reasonable or foreseeable consequence of that transfer, or alternatively, if Pocklington completed the transfer recklessly, was wilfully blind to its consequences, or was indifferent as to whether or not it caused a breach, the necessary intent element for the tort will be met."
The respondent's submissions
Douglas v Hello Ltd ("Hello")
"a) an intention to cause economic harm to the claimant as an end in itself;
b) an intention to cause economic harm to the claimant because it is a necessary means of achieving some ulterior motive;
c) knowledge that the course of conduct undertaken will have the inevitable consequence of causing the claimant economic harm;
d) knowledge that the course of conduct will probably cause the claimant economic harm;
e) knowledge that the course of conduct undertaken may cause the claimant economic harm coupled with reckless indifference as to whether it does or not.
A course of conduct undertaken with an intention that satisfies test a) or b) can be said to be 'aimed', 'directed', or 'targeted' at the claimant. Causing the claimant economic harm will be a specific object of the conduct in question. A course of conduct which only satisfies test c) cannot of itself be said to be so aimed, directed or targeted, because the economic harm, although inevitable, will be no more than an incidental consequence, at least from the defendant's perspective. Nonetheless, the fact that the economic harm is inevitable (or even probable) may well be evidence to support a contention that test b), or even test a), is satisfied."
"[199] Thus far, judicial statements in relation to intention are wholly consistent with those in relation to the tort of unlawful interference. There is no requirement of a predominant intention to harm the claimant, but such harm must none the less be an object of the defendant's conduct, albeit aimed at achieving an ulterior purpose. Dimbleby was such a case. The ultimate object was to harm the printers, but there was a deliberate intention to prevent Dimbleby from performing the contract in order to achieve this end."
"[205] Since the decision in Millar v Bassey, it is the approach of Peter Gibson LJ, rather than that of Beldam LJ, that has found judicial favour. In Issac Oren v Red Box Toy Factory Ltd [1999] FSR 785, Jacob J considered the tort of interfering with contractual relations, which requires an intention to interfere, and expressly followed the approach of approach of Peter Gibson LG, saying at p 799 that the unlawful conduct must "in some real sense be 'aimed at' the contract." In OBG Ltd v Allen [2005] EWCA Civ 106, at paragraphs 43 and 82-3 respectively, Peter Gibson LJ himself (with whom Carnwath LJ agreed) and Mance LJ (who dissented in the result) adopted the approach of Peter Gibson LJ, in preference to that of Beldam LJ, in Millar v Bassey. Indeed, they expressed the view that Peter Gibson LJ's approach was that of the majority in Millar v Bassey."
"[214] However, in all cases of alleged unlawful interference and unlawful means conspiracy where liability has been established, the necessary object or purpose of causing the claimant economic harm has not been made out unless the conduct can be shown to have been aimed or directed at the claimant. That seems to us to be the consistent theme in the two Lonrho cases in the House of Lords.
[216] Cases on other economic torts appear to us to have approached the question of intention in the same way. For example, in the context of inducement, in the passage quoted above from Allen v Flood, Lord Watson referred to "the use of illegal means directed against a third party". In her book, at p 101, Hazel Carty traces the tort of unlawful interference back to the assertion of Lord Lindley in Quinn v Leathem at p 495, by reference to Lumley v Gye (1853) 2 E & B 216, that the underlying principle was "wrongful acts done intentionally to damage a particular individual and actually damaging him".
[217] The relevant conduct was as much directed at the claimant in the Kuwait Oil Tanker case as in all the others. Only by diverting income that should have gone to the claimants could the defendants have enriched themselves. In other words test b) was satisfied, because the very act of diverting the money to the defendants required and involved (as opposed to merely resulted in) diverting the money away from the claimant. Indeed, it may be said that the wrongful act of diverting the money from the claimant in a sense preceded the ulterior motive, namely the receipt of the money by the defendant. However, in some situations an unlawful act will have adverse financial consequences to third parties, which are foreseeable and foreseen, but which are not consequences that the defendant desires or has any interest in bringing about. The statement from Bourgoin cited in the Kuwait Oil Tanker case might suggest that foresight of consequences must always be equated with intention to cause them – i.e. that satisfying test c) will suffice to establish the necessary intention. However, as we have explained in a paragraph 208 above, looked at the context in which the statement was made, it does not carry that inference.
[218] The authorities that we have considered indicate that it is of the essence of the torts of unlawful means conspiracy and unlawful interference that the conduct that causes the harm is aimed or directed at the claimant, and that in such cases the courts have inferred that the requisite intention, that is the purpose or object of causing the claimant economic loss, is present. The one discordant voice is that of Woolf LJ in Lonhro v Fayed. He postulated that foresight by a defendant of harm to a plaintiff was sufficient to satisfy the mental element in the tort of unlawful interference even though there was no desire to bring about that consequence in order to achieve what he regarded as his ultimate end. If by this Woolf LJ meant that foresight of an incidental consequence of unlawful action sufficed to constitute the mental element of the tort, even though achieving that consequence was no part of the defendant's design, we consider that his statement was contrary to the weight of the authority that we have summarised.
[219] As to the cases on interference with contractual rights, Tony Weir in his published lectures on Economic Torts (1997) reacted strongly against the decision in Millar v Bassey. At p 19 he said this:
"Admittedly it was a striking-out action, but what nonsense that it should go to trial, that Miss Bassey should have to defend herself against five people she had never contracted with and did not aim to harm just because she changed her mind about making a recording. Must I perform my contract with you just because a third party may, to my knowledge, suffer if I don't? Suppose that I agree to buy goods from you knowing that if the sale goes through, your agent will received a hefty commission: am I liable to him for refusing to accept delivery? In such a case there is only one third party: in Millar v Bassey the defendant looked to be liable to a whole orchestra plus the electronic bank. Dear me! Privity come back! – almost all is forgiven. It is easy to see how wrong this decision is, and we shall see later how it came to be possible."
[220] Other commentators have expressed similar, although more moderate, views. We consider that the conclusions of Peter Gibson LJ are to be preferred to those of Beldam LJ. It is often the case that failure to perform one contract will lead to a series of consequent breaches of contracts to which the original contract breaker is not party. To render him liable for these breaches simply because they are consequences which he foresaw would be to undermine the doctrine of privity of contract.
[221] Professor Weir and most other writers, including Hazel Carty and Messrs Sales and Stilitz, are of the view that the gist of all the economic torts is the intentional infliction of economic harm. We consider that this is a fair and satisfactory conclusion to draw from the authorities, difficult as some of these are to reconcile. Intention to inflict harm on a claimant is not the same as a wish to harm him. It is, however, very different from knowledge that economic harm will follow as a result of incidental consequences of conduct, when those consequences are not necessary steps in achieving the object of the conduct and are unsought.
[222] Three Rivers establishes that foresight of probable injury or subjective recklessness as to whether such injury is caused is the mental element required in relation to the consequences of abuse of power, if the cause of action of misfeasance in public office is to be made out. This is a developing tort, as is the tort of unlawful interference. Is there a case for equating the mental element in the two torts? The House of Lords did not so suggest in Three Rivers, and Clarke J, who sat at first instance in Three Rivers, did not consider that there was – see at [1996] 3 All ER 558 at p 583. We do not consider that there is. The gist of the tort of misfeasance in public office is the deliberate abuse of power. The mental element in the first form of the tort, namely targeted malice, bears strong echoes of the mental element required for unlawful interference, particularly in the early days of the development of that tort. The same is not true of the alternative requirements of foresight of consequences or subjective recklessness. These are not the gist of the tort; they are closer to control mechanisms limiting the liability that flows from the wrongful conduct.
[223] The gist of the tort of unlawful interference is the intentional infliction of economic harm. In other words, it must be shown that the object or purpose of the defendant is to inflict harm on the claimant, either as an end in itself, or as a means to another end. If foresight of probable consequences or subjective recklessness sufficed as the mental element of the tort, this would transform the nature of the tort. This, in effect, is what Mr Browne sought to persuade us to do when he advanced tests d) and e) as sufficient to satisfy the mental element in the tort of unlawful interference. Indeed, we take the view that satisfaction of test c) would not be sufficient to establish the requisite mental element. However, as mentioned in paragraph 159 above, establishing that the defendant knew that the claimant would suffer economic loss may well be evidence which can support a contention that test b) or even test a) is satisfied.
[224] It might be possible to envisage a case in which an intention satisfying test a) or b) could be established even though the unlawful act was not aimed, targeted or directed at the claimant. Equally it might be possible to envisage a case in which the relevant intention was not established, even though the unlawful conduct was in some way directed at the claimant. These are, however, unlikely scenarios and the decided cases do not provide an example of either. In principle we agree with Hazel Carty, and what she describes as 'most commentators', that it is necessary to prove targeted or directed harm. The essence of the tort is that the conduct is done with the object or purpose (but not necessarily the predominant object or purpose) of injuring the claimant or, which seems to us to be the same thing, that the conduct is in some sense aimed or directed at the claimant."
Conspiracy to injure by lawful means | predominant intention to injure |
Conspiracy to injure by unlawful means | predominant intention to injure not required but the claimant must establish that the defendant's conduct was done with the object of injuring him |
Intentional infliction of harm by unlawful means | the same intention as in conspiracy to injure by unlawful means |
Interference with contractual relations | Where the interference is direct, the defendant must know of the relevant contract and his conduct must be aimed or directed to the claimant in the sense that it has the necessary, or alternatively, the natural and probable consequence that the contract with the claimant will be broken. In indirect unlawful interference, however, the claimant must establish knowledge of the relevant contract and that the defendant's conduct was aimed or directed at the claimant. |
"Nor [in] my view can a consequence be properly regarded as unintended or accidental if a deliberate action is taken knowing that it must inevitably bring about the consequence desired or not. In truth in such a case the actor intends to bring about both the undesired and the desired consequence, and is willing to bring about the one to achieve the other."
"if an act is done deliberately and with knowledge of the consequences I do not think that the actor can say that he did not "intend" the consequences or that that was not "aimed" at the person who, it is known, will suffer them."
"The conduct of the defendant [must] be aimed directly at the plaintiff, the contracting party who suffers the damage, in the sense that the defendant intends that the plaintiff's contract should be broken [and it is not] sufficient that the conduct should have the natural and probable consequence that the plaintiff's contract should be broken."
Conclusions
"There are strong policy reasons why the law should restrict the ambit of the tort in this way. The tort gives the plaintiff a right of action in respect of a failure to comply with the terms of a contract against a person who is not a party to the contract. This is inconsistent with contractual principles, in particular in breaching the privity rule (see Cane: Tort Law and Economic Interests (1991) pages 122-5). As Hobhouse J said in Rickless v United Artists Corp. [1986] FSR 502 at page 524 of the tort of wrongful interference with contractual relations:
Unless the tort is to become virtually equivalent to the enforcement of contracts against third parties, it must remain an essential element of the tort that the interference occurs with the requisite actual intent [sc. To cause a breach of the plaintiff's contract].
Further, without the limiting of the scope of the tort by the requirement of actual intention, freedom of action would be unduly restricted by liability for incidental consequences (see Fleming: The Law of Torts 7th edn (1987) 656). Interference with contracts may flow from competition and is the normal and expected consequence of industrial action. It would not be right for the law to discourage competition by encouraging actions by unsuccessful competitors or to allow tort actions by those who suffer only incidentally form another person's activities."
"These considerations are designed to keep a wide ranging tort within bounds. It is therefore important that they are not applied mechanically and that regard is had to the balancing demands of moral constraint and economic freedom. For these purposes the concepts of knowledge and intention, direct participation, the causative relevance of unlawful means, and the possibilities of justification, are presumably sufficiently flexible to enable the principles of the tort to produce the right result. Where in specific areas policy makes its own specific demands, statute law is present to lend a hand"
"The common law has always been jealous of any interference with trade."
Dispostion
Mr Justice Aikens:
Lord Justice Sedley :