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Unlawful interference with trade

Published online by Cambridge University Press:  02 January 2018

Hazel Carty
Hazel Carty*
Affiliation:
University of Manchester
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Extract

In Torquay Hotel Co Ltd v Cousins Lord Denning MR asserted: ‘I have always understood that if one person deliberately interferes with the trade or business of another, and does so by unlawful means … then he is acting unlawfully, even though he does not procure or induce any actual breach of contract’. Although during the parliamentary debate over what became the Employment Act 1980, Lord Hailsham stated that no such tort existed, Lord Wedderburn replied that ‘a student of today must be affected by legal myopia if he did not understand the existence of this tort’. The purpose of this article is to examine the existence and scope of this tort – which I shall refer to as unlawful interference with trade – to place it in the context of the known economic torts, to discover its common law background and to outline its present and possible future role in commercial and industrial law.

Type
Research Article
Information
Legal Studies , Volume 3 , Issue 2 , July 1983 , pp. 193 - 207
Copyright
Copyright © Society of Legal Scholars 1983

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References

1. [1969] 2 Ch 106 at 139. Re-iterating what he said in Daily Mirror Newspapers Ltd v Gardner [1968] 2 QB 762 at 782.

2. ‘He [referring to Lord Wedderburn in Clerk and Lindsell on Torts] states that there exists a tort of uncertain ambit which consists in one person using unlawful means with the object and effect of causing damage to another … we do not believe that this new planet exists at all’ Hansard HL Debs Vol 410, col 681, June 12 1980.

3. Ibid col 686.

4. See Weir (1964) CLJ 225, where he notes that even in a rat race short cuts are forbidden. I propose to deal only with the general economic torts but not passing off which has a more specific role to play.

5. So that an individual acting alone would not be liable.

6. See Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435, HL. Lord Diplock in Lonrho v Shell, see n. 7 infa, indicated that this may also be true in the case of a combination to use unlawful means.

7. See Lonrho v Shell Petroleum (No 2) [1982] AC 173 at 188.

8. [1952] 1 Ch 646 at 694–695; 696–697.

9. Jenkins LJ does include in his discussion of the direct form of this tort, liability where the defendant does that which is inconsistent with the contract or prevents performance. With regard to interference with a contract without any breach resulting, see note 61 infa and the discussion in the text of Merkur v Laughton [1983] 2 WLR 778.

10. [1964] AC 1129.

11. Lord Denning in D & C Builders v Rees [1966] 2 QB 617 maintained that it could arise in a two-party situation (at 625) and see Lord Devlin in Rookes v Barnard [1964] AC 1129 at 1205; cf, however, Lord Reid in Stratford v Lindley [1965] AC 269 at 325.

12. Except the anomalous tort of simple conspiracy. To directly induce a breach of contract has been held to be ‘unlawful’ since the middle of the last century. It may be that the tort of directly inducing a breach of contract is better seen as having a different focal point to the general tort of unlawful interference with trade. For the tort of inducing breach of contract, contract rights provide the key to liability. Unlawful interference with trade centres on the use of unlawful means. However, now see Merkur v Loughton [1983] 2 WLR 778 discussed below.

13. It is submitted that the better view is that the defendant's act must be tortious. This was the case in the leading decision of GWK Co Ltd v Dunlop Rubber Co Ltd [1926] 42 TLR 376. Compare, however, the views of Evershed MR with those ofJenkins LJ in Thomson v Deakin.

14. The name varies: Professor Street terms this area of tort liability ‘intentionally causing economic loss by unlawful acts’; Heydon ‘intentional infliction of loss by unlawful means’; Winfield and Jolowicz ‘interference by unlawful means’. As for judicial acceptance of this tort see now Merkur v Laughton [1983] 2 WLR 778, discussed below.

15. See note 1 supra.

16. [1964] AC 1129 at 1178.

17. [1965] AC 269 at 324–325.

18. Ibid at 328.

19. Ibid at 337.

20. In the Court of Appeal: [1981] ICR 690. The case went to the House of Lords (see discussion later in text).

21. [1898] AC 1. Lord Denning (at p. 708 of his judgment in Hadmor Productions v Humilton) draws authority from Lord Herschell at 138 and Lord James of Hereford at 180.

22. 2E & B 216.

23. An interesting, if inconclusive, survey of judicial attitudes is contained in O'Higgins and Partington ‘Industrial Conflict: Judicial Attitudes’ (1969) 32 MLR 53.

24. [1895] 2 QB 21.

25. [1895] AC 587.

26. 13 CB 285: ‘An act which does not amount to a legal injury cannot be actionable because it is done with a bad motive’, per Parke B.

27. Including a man's trade in his own labour.

28. 11 East 574 at 575; 103 ER 1127 at 1128.

29. 11 Mod 74 at 75; 88 ER 898.

30. [1892] AC 25.

31. [1901] AC 495.

32. Ibid at 535.

33. [1899] AC 1 at 140. Mogul Steamship Co v McGregor is reported at [1892] AC 25.

34. Allen v Flood was decided between the trial at first instance of Quinn v Leathem and the time the motion to set aside the verdict came before the Divisional Court.

35. Cd 2825.

36. Giblan v NALUGBI [1903] 2 KB 600.

37. [1964] AC 1129 at 1215–1216.

38. [1918–1919] All ER 104.

39. Ibid at III. His views echo those of Lord Alverstone CJ and Buckley LJ in National Phonograph Co Ltd v Edison-Bell Consolidated Phonograph Co Ltd [1908] 1 Ch 335. See also n. 62 infra.

40. [1921] 3 KB 40.

41. Ibid at 69.

44. [1925] AC 700.

43. Ibid at 718–719 (repeating what he said while in the Court of Session in Mackenzie v Iron Traders Employers' Insurance Association [1910] SC 79 at 82).

44. Attempts have been made to rely on an innominate tort of causing loss by an intentional and unlawful act, a tort recognised by the High Court of Australia in Beaudesert Shire Council v Smith (1966) 120 CLR 145. This tort involves consequential loss. Interestingly, the court referred to Keeble D Hickeringill. See Dworkin and Harari, ‘The Beaudesert Decision’ (1960) 40 ALJ 296, 347. The Privy Council in Dunlop v Woollahra Municipal Council [1982] AC 158 and the House of Lords in Lonrhe v Shell [1982] AC 173 indicated that the Beaudesert tort will not be accepted into English common law. Indeed Beaudesert has never been followed by the Australian Courts themselves or other common law jurisdictions.

45. [1971] 3 All ER 1175, [1971] 1 WLR 1676.

46. [1968] 2 QB 502.

47. [1967] 1 WLR 1165.

48. [1982] 2 WLR 322.

49. [1982] QB 1127.

50. [1983] 2 WLR 778.

51. The immunities are contained in s. 13 of Trade Union and Labour Relations Act 1974. The Employment Act 1980 repealed s. 13(3) and introduced the concept of unlawful secondary action. Note that the Employment Act 1982 repealed s. 13(2) and limited the definition of a trade dispute (on which the immunity is based).

52. See n. 61, infra.

53. [1978] Ch 122.

54. [1982] 3 WLR 1007.

55. It may be that performers can claim a statutory tort in their favour. In Ex p Island Records the Court of Appeal held that no statutory tort existed in favour of any member of the record industry. This also seems to be the view of Oliver LJ in RCA v Pollard. Lawton and Slade LJJ, however, appeared to limit their discussion in that case to the lack of statutory tort in favour of the recording companies, rather than in favour of the performers Lord Diplock appeared to state (obiter) in Lonrho v Shell (see n. 58 infra) that performers had a statutory tort in their favour.

56. See particularly Springhead Spinning Co v Riley [1868] LR 6 Eq 551 where an injunction was granted in essence to protect the plaintiffs business interests. No tort liability was established. This case was approved by two members of the House of Lords in Gouriet v Union of Post Office Workers [1978] AC 435 per Viscount Dilhorne at 492; Lord Edmund-Davies at 506.

57. [1978] Ch 122 at 136.

58. [1982] AC 173.

59. [1982] 3 WLR 1007 at 1024.

60. See [1982] AC 173 at 187.

61. In Torquay Hotel v Cousins, Lord Denning stated: ‘the time has come when the principle [of Lurmley v Gye] should be further extended to cover deliberate and direct interference with the execution of a contract without that causing any breach’. However, the better view must be that unlawful means have to be used or a breach of contract result to render a defendant liable.

62. Note however the decision in National Phonograph Co Ltd v Edison-Bell Consolidated Phonographic Co Ltd [1908] 1 Ch 335, CA. The unlawful act in this case (causing harm to the plaintirs business) was a false misrepresentation not actionable in itself.

63. See n. 56 Supra.