Explanation of Economic Torts in UK & Australia
Explanation of Economic Torts in UK & Australia
ANTHONY GRAY†
I INTRODUCTION
The status of the economic torts in Australian law has not featured in
recent academic writing, and has not been the subject of much judicial
consideration. This article intends to bridge this gap. It was prompted
by a controversy involving a sporting star. Rugby Australia terminated
the contract of star player Israel Folau due to his social media activity.
One issue that has been raised is whether sponsors may be liable to the
player for one of the economic torts, such as inducing breach of
contract and/or interference with trade or business.1 While the former
tort has been well accepted in Australian tort law, there remains real
uncertainty about the latter.
More broadly, some of the literature in this area has raised a broader
question of the relation among the so-called economic torts.2 They
have grown in a somewhat haphazard way, and there is substantial
overlap between them.3 Thus, the current dispute might provide the
catalyst to ask two questions. Firstly, whether Australian law does and
should recognise a tort of interference with trade or business of some
kind. It will be necessary to articulate and defend a precise description
of this tort, if it is to be accepted in Australian law. Secondly, if such
†
Professor Anthony Gray, School of Law and Justice, University of Southern
Queensland. Thanks to the anonymous referees for helpful comments on an
earlier draft.
1
Janet Albrechtsen, ‘Sponsors a New Law Front for Israel Folau’, The Australian
(Australia, 1 July 2019).
2
Hazel Carty, ‘The Modern Functions of the Economic Torts: Reviewing the
English, Canadian, Australian and New Zealand Positions’ (2015) 74(2)
Cambridge Law Journal 261 (‘The Modern Functions of the Economic Torts’).
3
Rosalie Balkin and Jim Davis, Law of Torts (LexisNexis, 5th ed, 2013) 597.
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4
Donoghue v Stevenson [1932] AC 562.
5
(1868) LR 3 HL 330.
6
Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520.
7
Northern Territory v Mengel (1995) 185 CLR 307.
8
John Dyson Heydon, ‘The Future of the Economic Torts’ (1975) 12 University
of Western Australia Law Review 1, 14; Simon Deakin, ‘Economic Relations’ in
Carolyn Sappideen and Prue Vines (eds), Fleming’s The Law of Torts (LawBook,
10th ed, 2011) 769. Robert French noted that leading torts textbook writers Clerk
and Lindsell had referred to the economic torts as ‘ramshackle’ and ‘lacking their
Atkin’ (presumably a reference to the rationalisation of the tort of negligence in
the landmark judgment of Lord Atkin in Donoghue v Stevenson (n 4): Robert
French, ‘Torts in Commercial Law: Promiscuous Entanglement or Blessed
Union?’ in Simone Degeling, James Edelman and James Goudkamp (eds), Torts
in Commercial Law (Thomson Reuters, 2011) 17.
9
Tony Weir, Economic Torts (Clarendon Press, 1997) 9.
10
Perre v Apand Pty Ltd (1999) 198 CLR 180, 192 (Gleeson CJ), 200 (Gaudron J),
209 (McHugh J), 241 (Gummow J), 267–9 (Kirby J), 299 (Hayne J), 324
(Callinan J).
296
296
21 FLJ 295] ANTHONY GRAY
In the current context, the courts are wary about imposing liability
in this space for the policy reason that they do not wish to punish
legitimate commercial activity, which is generally a societal good in
terms of creating employment, goods and services, and taxation
revenue for society. On occasion, courts have recognised the right of
a person or organisation to engage in business or trade.14 The line
between legitimate commercial activity which the law should respect,
and action taken by some in business that damages or hurts
competitors or other businesses, can be a fine one.15
11
For instance, requiring the defendant assume a responsibility to the plaintiff, and
the plaintiff relied on the defendant’s expertise, thereby suffering loss: Hedley
Byrne & Co Ltd v Heller and Partners Ltd [1964] AC 465; or the defendant is
aware the plaintiff as an individual or organisation, and not merely as a member
of an unascertained class, will suffer economic loss if they do not exercise due
care: Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR
529.
12
The suggested law reform and the subject of this article was not considered in
the Ipp Review, because it was focussed on personal injury caused by negligence:
Review of the Law of Negligence (Final Report, September 2002).
13
OBG Ltd v Allan [2008] 1 AC 1.
14
Allen v Flood [1898] 1 AC 1, 173 (Lord Davey); Mogul Steamship Co Ltd v
McGregor, Gow and Co (1889) LR 23 QBD 598, 614 (Bowen LJ). ‘All the great
cases in the area of the economic torts … have been based on the principle that
the right to pursue a trade, business or livelihood free of certain forms of
interference, deemed to be illegitimate, deserves the protection of the law’:
Simon Deakin and John Randall, ‘Rethinking the Economic Torts’ (2009) 72
Modern Law Review 519, 534.
15
JSC BTA Bank v Khrapunov [2018] UKSC 19, [6] (Lords Sumption and Lloyd-
Jones for the Court).
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16
‘He who maliciously procures a damage to another by violation of his right ought
to be made to indemnify; and that whether he procures an actionable wrong or
breach of contract’: Lumley v Gye (1853) 2 El & Bl 234; 118 ER 749, 756 (Erle
J).
17
There was no equivalent, for example, to the Australian Competition and
Consumer Act 2010 (Cth).
18
This is regulated in Australia by Part 3-3 of the Fair Work Act 2009 (Cth) (‘Fair
Work Act’) for most employees.
19
Fair Work Act (n 18) ss 772(1)(b)–(d); Equal Opportunity Act 2010 (Vic) s 6(f);
Anti-Discrimination Act 1991 (Qld) s 7(k); Anti-Discrimination Act 1998 (Tas)
s 16(l); Anti-Discrimination Act 1991 (ACT) s 7(1)(j); Anti-Discrimination Act
1992 (NT) s 19(1)(k).
298
298
21 FLJ 295] ANTHONY GRAY
20
Deakin and Randall (n 14).
21
Carty, ‘The Modern Functions of the Economic Torts’ (n 2); Hazel Carty, An
Analysis of the Economic Torts (Oxford University Press, 2nd ed, 2010).
22
Dyson Heydon, ‘Justification in Intentional Economic Loss’ (1970) 20
University of Toronto Law Journal 139, 177.
23
Weir (n 9); Andrew J Stewart, ‘Civil Liability for Industrial Action: Updating
the Economic Torts’ (1984) 9(3) Adelaide Law Review 359. See also David
Goodwin, ‘Inhibiting Economic Coercion by Groups: An Examination of the
299
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The leading case where this tort was recognised was Lumley v Gye
(‘Lumley’).26 The facts involved a contract between the plaintiff and a
singer for her to perform at the plaintiff’s venue. This was a contract
for services, not a contract of service. It was alleged the defendant
induced the singer to abandon this contract and perform at his venue
instead. The question was whether the plaintiff had a cause of action
300
300
21 FLJ 295] ANTHONY GRAY
against the defendant for so doing. Obviously, the action against the
defendant could not be for breach of contract, since they were not party
to it. A majority of the Queen’s Bench recognised a cause of action
based on procuring breach of an employment contract. Of the three
justices in the majority, two expressly confined their comments to
cases of breach of contract,27 but one, Erle J, expressed the relevant
principle in broader terms, that a person who maliciously damaged
another by violation of their (legal) right was liable.28 Violation of
their right in this case involved breach of contract, but could involve
violation of other rights.29 All members of the majority described the
defendant’s actions in such a case as ‘malicious’,30 a concept that
would trouble subsequent courts in determining the proper contours of
the tort. Lumley extended the previous law by recognising a right of
recovery in a case involving a contract for services, rather than a
contract of service.
Over the course of a century, the courts were called upon to explain
and refine these concepts further. Inevitably, courts were pressed to
expand the doctrine in order to fit more scenarios within its relatively
narrow limits.
27
Ibid 752 (Crompton J), 756–9 (Wightman J).
28
He did not cite the decision in Keeble v Hickeringill (1809) 11 East 574; 103 ER
1127, 1128 where Holt CJ had expressed the broad principle that ‘he that hinders
another in his trade or livelihood is liable to an action for so hindering him’, but
that statement is consistent with the broader view upon which Erle J based
liability in Lumley v Gye. Sayre says, ‘many thought of Lumley v Gye simply as
the reincarnation of the doctrine of Keeble v Hickeringill’: Sayre (n 24) 672.
29
Lumley v Gye (n 16) 756 (Erle J).
30
Ibid 752 (Crompton J), 756 (Erle J), 756 (Wightman J); Cattle v Stockton
Waterworks (1875) LR 10 QB 453, 458: ‘all three of the judges who gave
judgment for the plaintiff relied on malicious intention’ (Blackburn J for the
Court, referring to Lumley v Gye).
31
(1881) 6 QBD 333.
301
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plaintiff, and that the act was done for a wrong motive/maliciously,32
which was not a stated requirement in Lumley. It also expanded the
doctrine, or at least adopted the broader view of it, expressed by one
judge in Lumley. Brett LJ accepted that broader view of Erle J in
Lumley that the action was not limited to cases of inducing a breach of
contract, but was rather a broader principle against wrongful acts
which may or do cause injury to another.33 The reach of the doctrine
was expanded again when it was applied to general supply contracts.34
The Privy Council later resiled from suggestions in Bowen that the
gist of the Lumley action was malicious conduct.35 That was important
on the facts because the defendants claimed they acted for the benefit
of both the plaintiff and their members. The Council determined the
union had induced breach of contract in calling its members to strike
on particular days. The fact they did it in order to drive up commodity
prices, which would benefit both the plaintiff and the workers, was
irrelevant. The Council determined intent, not maliciousness, was the
gist of the Lumley v Gye action.36 Lord Lindley suggested dropping
the word ‘malicious’ altogether because it did not add anything to the
requirement of knowledge of the relevant contract.37
32
Ibid 337 (Brett LJ, Lord Selborne agreeing). However, subsequently Brett LJ
suggests the requirement of maliciousness would be satisfied if the action was
taken with the purpose of injuring the plaintiff, or of benefitting the defendant at
the expense of the plaintiff, thus merging the second and third requirements: at
338. Coleridge CJ, dissenting, rejected the view the existence or otherwise of
‘malice’ should be the determinant of legal liability: at 343.
33
Ibid 337. This is also suggested by Lord Lindley in Quinn v Leathem [1901] AC
495, 535.
34
Temperton v Russell [1893] 1 QB 715.
35
South Wales Miners’ Federation v Glamorgan Coal Co Ltd [1905] AC 239.
36
See also Ware and De Freville Ltd v Motor Trade Association [1921] 3 KB 40,
91 (Lord Atkin).
37
South Wales Miners’ Federation v Glamorgan Coal Co Ltd (n 35) 255. To like
effect see Larkin v Long [1915] AC 814, 843 (Lord Parmoor).
302
302
21 FLJ 295] ANTHONY GRAY
that hirers of the plaintiff’s barges could not return them in accordance
with the time stipulation in their hire contract. The House of Lords
rejected the defence of the union that they were not aware of the
specific terms on which the barges were hired. The Court was prepared
to infer the union would have had some knowledge at least of the
nature of the hire contracts.38 It was not necessary that the defendant
be shown to know all of the specific details.39
The tort was expanded again with suggestions or decisions that the
principle of Lumley v Gye should be extended to include cases where
no breach of contract had occurred, for example, where performance
of contracts was merely hindered,40 or where a clause of the contract
would have the effect that the plaintiff would not be held liable for a
failure to perform contractual obligations.41 It was also suggested the
tort could apply to indirect, as well as direct, procurements of a breach
of contract.42 This was at a time when the courts appeared to be
indecisive about whether the tort of inducing breach of contract was a
standalone tort (separate torts theory), or part of a broader tort to be
discussed presently (unified tort theory).
38
J T Stratford and Son Ltd v Lindley [1965] AC 269, 324 (Lord Reid, Viscount
Radcliffe agreeing).
39
Ibid 332 (Lord Pearce). See also Falconer v Alsef [1986] IRLR 331; SOS
Kinderdorf International v Bittaye [1996] 1 WLR 987, 993 (Lord Keith).
40
Temperton v Russell (n 34) 728 (Lord Esher); DC Thomson and Co Ltd v Deakin
[1952] Ch 646, 678 (Raymond Evershed MR), 694 (Jenkins LJ) (Court of
Appeal); Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106, 138 (Lord Denning)
(Court of Appeal).
41
Torquay Hotel Co Ltd v Cousins (n 40).
42
D C Thompson and Co Ltd v Deakin (n 40) 677–8 (Evershed MR, Morris LJ
agreeing), 696 (Jenkins LJ, Morris LJ agreeing). Lord Denning disagreed in
Torquay Hotel Co Ltd v Cousins (n 40) 138, stating that for the principle of
Lumley v Gye to apply, interference had to be direct.
43
OBG Ltd v Allan (n 13) 31 (Lord Hoffmann), 59–62 (Lord Nicholls). Lord
Nicholls added there was no hybrid tort of interfering with contractual relations:
at 62. Lord Walker expressed agreement on these matters with both Lords
Hoffmann and Nicholls on these points: at 74; as did Baroness Hale: at 85; and
Lord Brown: at 91.
303
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action for inducing breach of contract was logically distinct from, and
separate to, action for causing loss by unlawful means. A Lumley v
Gye action was not a sub-category of this suggested broader category
of liability. The Court noted substantial differences between the tort of
inducing breach of contract, and the tort of causing loss by unlawful
means, discussed below.44
44
Lord Hoffmann pointed out four differences: (a) liability under the Lumley v Gye
tort of inducing breach of contract is secondary or accessory, depending on a
breach of contract by another; in contrast, an action for the tort of causing loss
by unlawful means is primary, in that it is not necessary to prove that another has
committed a wrong; (b) the ‘wrong’ required for the tort of causing loss by
unlawful means is a wrong independent of the Lumley v Gye rule, while under
Lumley v Gye, the relevant wrong is breach of contract by another; thirdly the
tort of causing loss by unlawful means is not dependent on a contract, so it can
encompass a broader range of behaviour than the Lumley tort; and fourthly, while
in Lumley, proof of intention to cause breach of contract is required, it is not
necessary to prove this intention for the tort of causing loss by unlawful means:
OBG Ltd v Allan (n 13) 20. To like effect Lord Nicholls: at 59.
45
Ibid 20.
46
Ibid 29–30. To like effect Lord Hoffmann: at 62–3.
47
South Wales Miners’ Federation v Glamorgan Coal Co Ltd (n 35) 244 (Lord
Halsbury).
304
304
21 FLJ 295] ANTHONY GRAY
48
‘The most remarkable feature in the growth of this tort action is the surprising
rapidity with which courts have adopted it, broadened it, and pared away
restricting limitations’: Sayre (n 24) 674.
49
(1620) Cro Jac 567; 79 ER 485.
50
(1707) 11 East 574; 103 ER 1127, 1128.
51
In Keeble the plaintiff was successful, although there was no finding that what
the defendant did was legally wrong (the plaintiff had set ‘decoys’ onto his
property, intending to attract fowl that he could capture to consume. In response,
the defendant fired shots from a gun, intending to and having the effect of scaring
305
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The law had to consider the interaction between this nascent tort of
unlawful interference in the plaintiff’s business and the older tort, of
which Lumley v Gye was a modern example, of inducing breach of
contract. How were they related, if at all? Was there overlap between
them? Was one really a sub-category of the other, rather than a
standalone tort? How did they relate to the tort of conspiracy? The tort
of intimidation was not recognised at this time, but its subsequent
development would pose further questions.
off the fowl, affecting the plaintiff’s catch. The Court found for the plaintiff).
This has been criticised: ‘This decision [Beaudesert Shire Council v Smith, a
High Court decision which purported to adopt the Keeble reasoning] has been
widely discussed and criticised. The major criticism has been that, the way the
High Court framed its proposition, the decision meant that whether or not a
defendant intended to injure the plaintiff, the plaintiff would recover and that this
was akin to creating a strict liability principle of actionability for too wide a range
of injuries’: H J Glasbeek ‘Lumley v Gye: The Aftermath: An Inducement to
Judicial Reform?’ (1975) 1 Monash University Law Review 187, 212.
52
(1790) 1 Peake 270; 170 ER 153.
53
In a further muddying of the waters, in the later House of Lords decision in
Rookes v Barnard [1964] AC 1129, Lord Hodson would link Garret v Taylor
and Tarleton v M’Gawley with the tort of intimidation: at 1198.
306
306
21 FLJ 295] ANTHONY GRAY
54
[1892] AC 25.
55
Ibid 52 (Lord Field), 59 (Lord Hannen).
56
‘Now intentionally to do that which is calculated in the ordinary course of events
to damage, and which does in fact damage another in that person’s property or
trade, is actionable if done without just cause or excuse. Such intentional action,
when done without just cause or excuse, is what the law calls a malicious wrong’:
Mogul Steamship Co Ltd v McGregor, Gow and Co (n 14) 613 (Bowen LJ).
57
Temperton v Russell (n 34); Flood v Allen [1895] 2 QB 21, 37 (Lord Esher MR).
58
Allen v Flood (n 14).
307
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59
Ibid 92 (Lord Watson), 124 (Lord Herschell), 151 (Lord Macnaghten), 167 (Lord
Shand), 172 (Lord Davey); Weir (n 9) 21.
60
Allen v Flood (n 14) 96.
61
Ibid 124 (Lord Herschell), adding ‘the motive of injuring one’s neighbour or of
benefitting oneself at his expense it as old as human nature’: at 128, 180 (Lord
James).
62
Ibid 138 (Lord Herschell). Lord Herschell rejected the statements of Bowen LJ
in Mogul Steamship as ‘far too wide’: at 139, 151 (Lord Macnaghten).
63
Ibid 88 (Lord Halsbury LC). Lord Ashbourne found the defendants had
‘maliciously’ induced the company not to employ the workers and did it not for
their own purposes, but in order to obstruct: at 111–12; and Lord Morris found
that ‘it is actionable to disturb a man in his business … when the motive is
malicious and damage ensues’: at 155.
308
308
21 FLJ 295] ANTHONY GRAY
clear whether the tort was confined to cases involving actions of third
parties, though those were the facts in Allen v Flood.
64
Quinn v Leathem (n 33).
65
Ibid 510.
66
Ibid 535.
67
[1923] AC 709. ‘What was laid down long ago in Lumley v Gye reaches all
wrongful acts done intentionally to damage a particular individual, and actually
damaging him’: at 713 (Viscount Haldane).
68
Emerald Constructions Co Ltd v Lowthian [1966] 1 WLR 691; Daily
Newspapers v Gardner [1968] 2 QB 762. Both involved interlocutory
proceedings.
69
Torquay Hotel Co Ltd v Cousins (n 40).
309
309
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70
Ibid 139. See Owen (n 24) 60–4.
71
J T Stratford and Son Ltd v Lindley (n 38) 324 (Lord Reid), 330 (Viscount
Radcliffe).
72
OBG Ltd v Allan (n 13) 25 (Lord Hoffmann).
73
(1974) 129 CLR 151. Referring to United Kingdom decisions where ‘a person
who suffers economic loss as the result of an unlawful act intended to cause harm
can recover damages against the wrongdoer’: at 173–4.
74
Merkur Island Corporation v Laughton [1983] 2 AC 570. Fridman, noting that
by the early 1980s, ‘it had become accepted that, at common law, there was a
cause of action for interference with the performance of a contract, even though
no breach of that contract had been induced, procured or otherwise obtained by
the defendant’: G H L Fridman, ‘Interference with Trade or Business’ (Pt 1)
(1993) Tort Law Review 19, 21.
75
Weir (n 9) 28.
310
310
21 FLJ 295] ANTHONY GRAY
76
OBG Ltd v Allan (n 13) 31.
77
Again, it did not matter that the unlawful interference was committed in order to
achieve another end: OBG Ltd v Allan (n 13) 57. Lord Walker agreed with Lord
Hoffmann’s formulation: at 75; as did Baroness Hale: at 85; and Lord Brown: at
91. For an argument that OBG can be defended on a theory that the interests of
the plaintiff and the third party are ‘unified’, so avoiding problems with privity,
see Jason Neyers, ‘Causing Loss by Unlawful Means: Should the High Court of
Australia Follow OBG Ltd v Allan?” in Simone Degeling, James Edelman and
James Goudkamp (eds), Torts in Commercial Law (Thomson Reuters, 2011)
117.
78
Revenue and Customs Commissioners v Total Network SL [2008] 1 AC 1174.
79
Rookes v Barnard (n 53); Deakin and Randall (n 14) 544–8.
80
OBG Ltd v Allan (n 13) 57.
81
Ibid.
311
311
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plaintiff has suffered indirect loss due to the effect of the defendant’s
conduct on a third party with some relation to the plaintiff.82 The
House of Lords determined the torts should be kept separate, rejecting
the unified torts theory evident in cases such as Quinn v Leathem, DC
Thomson and Co Ltd v Deakin and Torquay Hotel.
The United Kingdom law recognised in the 17th and 18th century
that intentional and unlawful interference with another’s business
interests was an actionable tort. In hindsight, these precedents should
82
Ibid 56.
83
Weir called expansion of Lumley v Gye, for instance to include cases where no
breach of contract actually occurred, wrong. He said the case of Torquay Hotel,
where this extension was affirmed, ‘had nothing to do with Lumley v Gye, and
the suggestion that it did facilitate[d] the unjustifiable extension of liability to
cases where the interference is not by means wrongful in themselves … [and] the
defendant may be held liable to those he had no intention to harm, entailing a
large increase in the number of possible plaintiffs … [this is] something we
normally try to avoid’: Weir (n 9) 37–8.
312
312
21 FLJ 295] ANTHONY GRAY
84
‘I believe that the tort of inducing breach of contract has now been absorbed into
the general tort of causing harm by unlawful means. To the extent it has recently
developed distinctive rules, because such absorption has been ignored, this
development should promptly be put into reverse’: ibid 28.
85
OBG Ltd v Allan (n 13).
86
Ibid 47 (Lord Hoffmann), 75 (Lord Walker), 85 (Baroness Hale), 91 (Lord
Brown). Some see this as the orthodox view of the tort: Roderick Bagshaw, ‘Can
the Economic Torts be Justified?’ (1998) 18 Oxford Journal of Legal Studies
729, 730.
87
(1906) 3 CLR 686, 700.
313
313
FLINDERS LAW JOURNAL [(2020
88
Deakin and Randall who, after referring to Lord Hoffmann’s judgment restricting
the tort to cases of wrongful interference with actions of a third party, continue:
‘a more straightforward approach would have been to stress the need for the
claimant to show that he had an economic interest not in the specific relation with
the third party that was being interfered with, but more generally in a trade,
business or employment which was the subject or target of the defendant’s
action. This would be to revert to the language used in the Mogul, Allen and
Quinn cases’: Deakin and Randall (n 14) 533–4.
89
OBG Ltd v Allan (n 13) 56.
90
Ibid 55.
91
Ibid 55–6.
92
Ibid 56.
93
‘[T]here are situations in which the intentional harm tort should be applicable
even where no third party is involved’: Philip Sales and Daniel Stilitz,
‘Intentional Infliction of Harm by Unlawful Means’ (1999) 115 Law Quarterly
Review 411, 420.
314
314
21 FLJ 295] ANTHONY GRAY
The House of Lords did not take the step suggested here of viewing
the tort of inducing breach of contract as a sub-set of the wider tort of
unlawful, intentional interference with another’s commercial/business
interests. It gave several reasons for its decision to maintain the
separate torts, pointing out ways in which liability under Lumley v Gye
differed from liability for causing a business loss through unlawful
means. Given that this article respectfully disagrees with that position,
it is necessary to consider these reasons.
The first reason was that liability under Lumley v Gye was
accessorial in nature, depending upon another person committing the
primary tort. In contrast, the tort of causing loss through unlawful
means was not so limited, being an example of primary liability.94
While this may be true,95 there is no reason why the tort of causing
loss through unlawful means could not include this kind of accessory
liability. Nothing inherent in that tort requires only primary liability
be contemplated. It can be accepted that in terms of ‘unlawful’ means,
one example of unlawful means is procuring breach of contract. It is
doubted whether it is helpful to distinguish primary and secondary
liability;96 to the extent that it relates to questions of remoteness and
measure of damages, it might be useful; however, this does not (and
should not) preclude it from being part of a broader tort.
94
OBG Ltd v Allan (n 13) 20 (Lord Hoffmann), 59 (Lord Nicholls).
95
Weir disagreed: ‘I am far from supposing that the inducer’s tort is in any way
secondary … where the defendant has used the contractor as a means of harming
the plaintiff; in such cases the defendant is a primary wrongdoer’: Weir (n 9) 34–
6.
96
‘The best view is that the idea of accessorial or secondary liability is doctrinally
confusing and conceptually unnecessary, and should be rejected’: Deakin and
Randall (n 14) 544.
97
OBG Ltd v Allan (n 13) 20 (Lord Hoffmann).
315
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A third difference is that the unlawful means tort does not require
the existence of a contract, while the Lumley tort does. This is true, but
it is not a reason why the torts cannot be merged, particularly where
the position with respect to the new tort will be less onerous than it
was under Lumley. Others have pointed out the benefits of deciding
cases based on substance, rather than technical rules,98 a sentiment
which arguably fed the exponential growth in the Lumley tort. Some
have claimed contractual interests should be reified, justifying a
particular tort around inducing breach, which should remain distinct
from a general tort action.99 Maintaining Lumley v Gye as a separate
action effectively does this, because it does not require evidence of
specific intent to harm the plaintiff.100 With respect, my sense is that
the law is moving towards recognising civil obligations that
individuals owe to another based on broad principles, breaking down
technical rules and boundaries between contract and tort, and not
reifying interests protected by the former over the latter.101 This is part
of an argument that Lumley v Gye is an instance of the wider tort.102
Fourthly, the Court noted the plaintiff had to show the defendant
intended to cause them loss, which was not required for the Lumley v
98
J T Stratford and Son Ltd v Lindley (n 38) 330.
99
OBG Ltd v Allan (n 13) 27 (Lord Hoffmann), citing Philip Sales and Daniel
Stilitz, ‘Intentional Infliction of Harm by Unlawful Means’ (1999) 115 Law
Quarterly Review 411. See also Bagshaw (n 86) 735–6.
100
Deakin and Randall (n 14) 535.
101
Weir warns that ‘the formalism of our approach is at odds with the merits of
cases in two main respects: first, that some deplorable conduct escapes sanction
because no law or contract was broken, and secondly that people sometimes have
to pay because some infringement of law or contract occurred incidentally and
as a matter of happenstance’: Weir (n 9) 74.
102
‘[A]t least in the context of trade or business, the Lumley v Gye tort could be
folded into the wider tort of interference with trade or business, without
sacrificing the unity of purpose of structural logic of the economic torts. Where
the real interest protected by the torts resides in the business or livelihood of the
claimant, there would be much to be said for the focus of the tort being on
conduct aimed at causing harm to the business or livelihood as such … Lumley
v Gye was not challenged in OBG, but there are hints of judicial unease with the
idea that economic interests should be better protected simply because they are
bound up with expectations that a particular legal duty – contractual or otherwise
– will be performed’: Deakin and Randall (n 14) 537; D Howarth, ‘Against
Lumley v Gye’ (2005) 68 Modern Law Review 195.
316
316
21 FLJ 295] ANTHONY GRAY
103
OBG Ltd v Allan (n 13) 20, 35 (Lord Hoffmann).
104
Ibid 28–9 (Lord Hoffmann).
105
Lord Nicholls also made this point: ibid 61.
106
Leonard Hoffman, ‘The Rise and Fall of the Economic Torts’ in James Edelman,
James Goudkamp and Simone Degeling (eds), Torts in Commercial Law
(Thomson Reuters, 2011) 113, 116.
107
‘[T]he tort of conspiracy may be used to circumvent the OBG requirements of
intermediary use and actionability in the unlawful means torts … it may well be
… that the revitalisation process that started with the conspiracy tort will
insinuate itself into the application of the unlawful means tort’: Carty, ‘The
Modern Functions of the Economic Torts’ (n 2) 280–1.
317
317
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The leading case Quinn v Leathem111 was decided just after Allen v
Flood.112 The plaintiff regularly employed non-union labour.
Members of a union approached him, threatening that if he did not
cease to employ such labour, they would take measures against him.
They threatened to target one of his biggest customers, Munce. The
plaintiff and the unionists could not reach agreement. Subsequently
the union did target Munce, instructing members working with him to
strike. As a result, Munce told the plaintiff he would not be ordering
from the plaintiff for the foreseeable future, because he lacked the
workers to process the product, until the plaintiff resolved his
108
Rookes v Barnard (n 53) 1207 (Lord Devlin).
109
Deakin and Randall (n 14) 548. ‘[I]f the requirement of independent actionability
is irrelevant in the context of the unlawful means conspiracy tort, and is not
required in cases of threats (intimidation) under Rookes, it is hard to see what
purpose it serves in the tort of interference with trade or business by unlawful
means’: at 549–50. Michaels v Taylor Woodrow Developments Ltd [2001] Ch
493, 502 (Laddie J).
110
Mulcahy v R (1868) LR 3 HL 306, 317 (Willes J).
111
Quinn v Leathem (n 33).
112
Allen v Flood (n 14). Although the case was largely decided on principles of
conspiracy, it may have been decided as an inducing breach of contract case,
since the effect of what the unionists did was to break an existing agreement
between the plaintiff and its customer.
318
318
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113
Quinn v Leathem (n 33) 538.
114
Ware and de Freville Limited v Motor Trade Association (n 36).
115
Ibid 62 (Bankes LJ), 71 (Scrutton LJ), 80 (Atkin LJ).
116
Allen v Flood (n 14) 124 (Lord Herschell), 153 (Lord Macnaghten); Sorrell v
Smith [1925] AC 700, 724 (Lord Dunedin).
319
319
FLINDERS LAW JOURNAL [(2020
320
320
21 FLJ 295] ANTHONY GRAY
121
To be considered ‘unlawful’ for the tort of conspiracy, it is not necessary that the
defendant’s actions would have made them liable in tort. For instance, it includes
criminal behaviour not actionable in tort. This is because it is a form of primary,
not secondary, liability: Revenue and Customs Commissioners v Total Network
(n 78). However, this places it in conflict with the House of Lords’ formulation
of the intentionally causing loss by unlawful means tort, where the House insisted
the claim had to be actionable by the third party in order for the tort to apply.
122
Carty, ‘The Modern Functions of the Economic Torts’ (n 2) 280–1.
123
Rookes v Barnard (n 53) 1178 (Lord Reid), 1182–3 (Lord Evershed), 1205 (Lord
Devlin), 1200 (Lord Hodson), 1233 (Lord Pearce).
124
Deakin and Randall (n 14) 547.
321
321
FLINDERS LAW JOURNAL [(2020
125
Parker v The Queen (1963) 111 CLR 610.
126
Brisbane Shipwrights’ Provident Union v Heggie (n 87).
322
322
21 FLJ 295] ANTHONY GRAY
who refused to join the union. As a result, union officials told the
employer that unless and until he was dismissed, union members
would remain on strike. The employer dismissed the employee. The
Court found in favour of the dismissed employee. After discussing the
United Kingdom authorities, it identified three categories of case: (a)
the alleged interference with trade or business did not violate a legal
right, but was merely incidental to a lawful act (no action would lie);
(b) the alleged interference with trade or business is the direct result
of an unlawful act (an action would lie); and (c) the act is prima facie
neutral, where its consequences depend on the motive of the
defendant.127 Lumley v Gye was not considered here because there was
no evidence the employer breached the contract by terminating the
employee.
The Court found the case belonged to category (b). The acts were
contrary to s 543 of the Criminal Code 1899 (Qld), prohibiting a
person from conspiring with another to cause injury to a third person
in their trade or profession. This is what the union had done. The court
added if the case were considered to be one within category (c), the
plaintiff still had a case, because the jury had found the defendants
were motivated by a desire to injure the plaintiff, not trying to protect
legitimate business interests. Obviously, category (b) identified by the
High Court here is similar to the tort of unlawful interference with
trade or business, for which this article will argue later.
The Lumley action was considered in the High Court decision Short
v City Bank of Sydney.128 There Isaacs J emphasised the importance of
knowledge in determining whether the tort had been committed the
plaintiff had to show the defendant knew what they did would induce
or procure another to breach a contract.129 A defendant who believed
in good faith that what they did would not cause a breach of contract
by another would not have committed the tort. Nor would a defendant
who was unaware of the contract. If the defendant reasonably believed
whatever action they induced would not amount to breach of the
127
Ibid 700 (Griffith CJ, for Barton and O’Connor JJ).
128
(1912) 15 CLR 148.
129
Ibid 160.
323
323
FLINDERS LAW JOURNAL [(2020
contract, they would not have committed the tort. Nor if they believed
the contract was no longer on foot. Barton and O’Connor JJ simply
accepted the reasoning of the lower court.130
130
Ibid 155–6. In the New South Wales Supreme Court, Street J articulated three
elements to the tort: (a) the defendant in fact induced and procured the breach
complained of; (b) the breach was procured with the deliberate intention of
injuring the plaintiff, or where it should have been obvious that a reasonable
consequence of the defendant’s actions would be damage or injury to the
plaintiff; and (c) what the defendant did actually did injure or damage the
plaintiff. He stated that the word inducement suggested the idea of persuasion or
contrivance. The plaintiff would need to show ‘that the person whose actions are
complained of did something in the nature of effectually persuading or prevailing
upon the other party to the contract to violate his obligations’: Short v City Bank
(1912) 12 SR (NSW) 186, 202–3. To like effect Independent Oil Industries v
Shell Co of Australia Ltd (1937) 37 SR (NSW) 394, 414–15 (Jordan CJ, Long
Innes CJ in Eq and Davidson J agreeing).
131
(1939) 62 CLR 339.
132
‘The mere fact that the Commonwealth … without committing or threatening
any illegality, procured the shipowners and other carriers to refuse to carry the
plaintiff’s goods and thereby injured his trade would not suffice to give him a
cause of action. It is necessary that some unlawful or wrongful means should
have been used or threatened’: ibid 366.
133
Ibid.
134
Ibid 370.
135
Ibid.
324
324
21 FLJ 295] ANTHONY GRAY
136
Ibid 373.
137
Ibid 371. Cf Heydon, ‘The Future of the Economic Torts’ (n 8) 1: ‘it seems that
“persuasion” includes “advice”, for certain relationships such as that of union
organiser and employer are such that advice can be very persuasive’.
138
(1966) 120 CLR 145.
139
Ibid 156 (Taylor, Menzies and Owen JJ).
140
Gerald Dworkin and Abraham Harari, ‘The Beaudesert Decision – Raising the
Ghost of the Action Upon the Case’ (Pt 1) (1967) 40 Australian Law Journal
296; Gerald Dworkin and Abraham Harari, ‘The Beaudesert Decision – Raising
the Ghost of the Action upon the Case’ (Pt 2) (1967) 40 Australian Law Journal
325
325
FLINDERS LAW JOURNAL [(2020
In any event, this tort had a relatively short life. It was killed off by
the High Court in Northern Territory v Mengel (‘Mengel’).143 This is
an important development in the current context because, had the
Beaudesert tort continued, it would overlap with the suggested tort of
unlawful interference with business interests.144 However, the possible
new tort would be broader than the Beaudesert principle, because it
would not require the loss the plaintiff suffered be an ‘inevitable
326
326
21 FLJ 295] ANTHONY GRAY
consequence’ of the plaintiff’s actions. This also means the fact the
High Court overruled Beaudesert should not determine the court’s
decision about recognition of a possible new tort of unlawful
interference with business interests, because it lacks the troubling
features of Beaudesert.
145
It was primarily decided on the basis of the alleged tort of misfeasance in public
office.
146
Northern Territory v Mengel (n 7) 342 (Mason CJ, Dawson, Toohey, Gaudron
and McHugh JJ).
147
Ibid 343 (Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ).
148
(1998) 196 CLR 329.
327
327
FLINDERS LAW JOURNAL [(2020
149
Ibid 339 (Gleeson CJ, Gaudron, Kirby and Hayne JJ, Callinan J agreeing). Later
the Full Federal Court confirmed the mere fact the defendant knows of the clause
that is breached is not sufficient. It was necessary to show they knew or intended
what they did would result in a breach of the other contract: Allstate Life
Insurance Co v ANZ Banking Group Ltd (1995) 130 ALR 469, 486 (Lindgren J
for the Full Court). Later courts have accepted that recklessness or wilful
blindness to the other contract may be sufficient: Tszyu v Fightvision Pty Ltd
[1999] NSWCA 323, [171] (Sheller, Stein and Giles JJA). United Kingdom case
law had adopted a similar position: Emerald Constructions Co Ltd v Lowthian (n
68) 700–1 (Lord Denning), 703–4 (Lord Diplock) (Court of Appeal).
150
Sanders v Snell (n 148) 341 (Gleeson CJ, Gaudron, Kirby and Hayne JJ, Callinan
J agreeing).
151
Ibid 344 (Gleeson CJ, Gaudron, Kirby and Hayne JJ, Callinan J agreeing).
152
(2004) 218 CLR 530.
153
Ibid 570 (Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ).
328
328
21 FLJ 295] ANTHONY GRAY
154
LED Technologies Pty Ltd v Roadvision Pty Ltd [2012] FCAFC 3, [52] (Besanko
J for the Full Federal Court); Civic Video Pty Ltd v Paterson [2016] WASCA 69,
[52] (Newnes J for the Court of Appeal).
155
LED Technologies Pty Ltd v Roadvision Pty Ltd (n 154) [53]. In Australian
Football League v Hard On Sports [2012] VSC 475, the Court referred to a
requirement of ‘sufficient knowledge to ground an intention to interfere with
contractual rights’: at [68].
156
LED Technologies Pty Ltd v Roadvision Pty Ltd (n 154) [54] (Besanko J for the
Full Federal Court); Civic Video Pty Ltd v Paterson (n 154) [52] (Newnes J for
the Court of Appeal).
157
Donaldson v Natural Springs Australia Limited [2015] FCA 498, [208] (Beach
J).
158
[2015] VSCA 73.
329
329
FLINDERS LAW JOURNAL [(2020
As indicated, the High Court has twice expressly left open160 whether
Australian law should follow OBG and recognise a tort of unlawful
interference with business or commercial interests. Earlier decisions
like Brisbane Shipwrights and James v Commonwealth had apparently
recognised the tort. There is and has been substantial Australian
academic support for it, providing a remedy where Lumley v Gye could
not, because no breach of contract occurs,161 and because of the narrow
way in which that tort’s requirements have been applied. Inevitably,
lower courts have been asked to recognise the broader tort. A mixture
of approaches has been evident.
159
Winsmore v Greenbank (1745) Willes 577; 125 ER 1330, 1332.
160
Northern Territory v Mengel (n 7); Sanders v Snell (n 148).
161
‘[I]t makes perfect sense to recognise that the doing of an illegal act which
indirectly hinders or prevents performance should be actionable even where no
suggestion of breach arises’: Stewart (n 23) 362.
162
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, 150–2
(Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ).
330
330
21 FLJ 295] ANTHONY GRAY
has appeared reluctant to do so. For example, since 1992 lower courts
in Australia have determined good faith applies to Australian
contracts.163 The Supreme Court in Canada164 and in the United
Kingdom165 has done so. Yet when the Australian High Court has been
asked to determine the question, it has declined to do so.166 Difficulties
can arise when the High Court refuses to make a decision for the nation
about a particular legal controversy, yet appears to view dimly
occasions where lower courts make such calls.
As already noted, the question of the existence of the broader tort has
been the subject of consideration by the High Court. To date, that Court
has declined to decide whether the broader tort should be recognised as
part of Australian law. The definitive decision which the appellant seeks
– that the broader tort is not part of the common law of Australia – is a
decision which could only be made by the High Court.168
163
Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26
NSWLR 234; Bundanoon Sandstone Pty Ltd v Cenric Group Pty Ltd [2019]
NSWCA 87, [154]–[156] (Gleeson JA, Meagher and McCallum JJ agreeing). Cf
Esso Australia Resources Pty Ltd v Southern Pacific Petroleum NL [2005]
VSCA 228; Nuncio D’Angelo, ‘The Ongoing Saga of an Implied Duty of Good
Faith in Contracts’ (2019) 93 Australian Law Journal 519, 524–5. The apparent
inconsistency between the positions in New South Wales and Victoria might be
thought to be ripe for definitive High Court determination of the common law
position in Australia.
164
Bhasin v Hrynew [2014] 3 SCR 494, [32] (Cromwell J for the Court); Anthony
Gray, ‘Development of Good Faith in Canada, Australia and Great Britain’
(2015) 57(1) Canadian Business Law Journal 84.
165
Telefonica O2 UK Ltd v British Telecommunications plc [2014] UKSC 42, [37]
(Lord Sumption for the Court).
166
Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002)
240 CLR 45.
167
[2014] VSCA 348.
168
Ibid [31] (Maxwell P, Neave, Redlich, Beach and Kaye JJA). See also Ballard v
Multiplex [2012] NSWSC 426, [85] (McDougall J); Deepcliff Pty Ltd v Council
of the City of Gold Coast [2001] QCA 342, [72] (Wiliams JA); Donaldson v
Natural Springs Australia Limited [2015] FCA 498, [222] (Beach J); Ooranya
Pty Ltd v ISPT Pty Ltd [2018] WASC 256, [60] (Martin J).
331
331
FLINDERS LAW JOURNAL [(2020
169
Deepcliff Pty Ltd v Council of the City of Gold Coast (n 168).
170
[2010] WASC 403.
171
Ibid [711]–[719].
172
Carty, ‘The Modern Functions of the Economic Torts’ (n 2) 272; AI Enterprises
Ltd v Bram Enterprises Ltd [2014] 1 SCR 177, [54] (Cromwell J for the Court).
332
332
21 FLJ 295] ANTHONY GRAY
Subsequent lower court decisions have largely applied these rules. The
Court expressed the two parts of the tort in Ballard v Multiplex.178
McDougall J found in order for a conspiracy by lawful means to be
actionable, evidence was required that the combination had the sole or
predominant purpose to injure a third party. For conspiracy by
unlawful means to be actionable, it had to be motivated by a purpose
of harming a third party. The purpose would need to have been either
agreed upon by all, or at least known to all who participated. The
purpose of a conspiracy was not controlled by the immediate result.
The mere fact a competitor was ruined as a result of what the members
173
(1931) 46 CLR 343.
174
Ibid 362 (Dixon J, Rich and McTiernan JJ agreeing).
175
Ibid 362 (Dixon J, Rich J agreeing at 354, McTiernan J agreeing at 412). Evatt J
expressed a similar view: at 393. The dissents (Gavan Duffy CJ and Starke J)
related to the application of the principles to the facts, not the principles
themselves.
176
Ibid 380.
177
(1959) 103 CLR 30. In that case the conspiracy existed to commit unlawful acts:
at 78 (Fullagar J, Dixon CJ and Kitto J agreeing), 105 (Taylor J), 124 (Menzies
J).
178
Ballard v Multiplex (n 168).
333
333
FLINDERS LAW JOURNAL [(2020
of the combination did did not prove they were engaged in an illicit
conspiracy. It had to be shown the conspiracy had this purpose.179
179
Ibid [65]–[69]. Applied in JR Consulting & Drafting Pty Ltd v Cummings [2014]
NSWSC 1252, [251]–[260], similarly Nanosecond Corporation Pty Ltd v Glen
Carron Pty Ltd (No 2) [2018] SASC 188, [374]–[376] (Doyle J). Doyle J also
accepted it might be difficult to obtain direct evidence of an agreement to injure,
so they may infer this from ‘concurrences of time, character, direction and result’
of apparently disparate acts: at [373].
180
Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254
CLR 181, 225 (Crennan, Bell and Keane JJ); Sid Ross Agency v Actors and
Announcers’ Equity Association of Australia [1971] NSWLR 760; CFMEU v
Boral Resources (Vic) Pty Ltd (n 167).
181
Sid Ross Agency v Actors and Announcers’ Equity Association of Australia (n
180) 766.
182
Neyers (n 77) 119.
334
334
21 FLJ 295] ANTHONY GRAY
A Not Radical
335
335
FLINDERS LAW JOURNAL [(2020
183
Stewart (n 23) 367.
336
336
21 FLJ 295] ANTHONY GRAY
The change would make the law much more capable of handling bad
behaviour and abuse of rights and of power; much more flexible; and
much more based on factors of substance rather than technicality …
[further] our law remedies intentional injuries to the plaintiff’s body, to
[their] nervous system, to [their] land and chattels; it is anomalous that a
general theory of intentional tortious liability has developed for injuries
to all these interests, but not for injuries to the plaintiff’s financial
interests. The generalizing tendency of the twentieth century common
law has passed the economic torts by.184
There is much to commend the suggestion that the principles which apply
to economic torts should be consistent with each other. After all, these
are creations of the common law and it is difficult to see why, for
example, an unlawful act which is sufficient to ground an action for
unlawful interference with trade should not also be sufficient to ground
an action for unlawful means conspiracy and conversely why an unlawful
act, if any, which is insufficient to support one should not also be
insufficient to support the other.185
C ‘Unlawful’
184
Heydon, ‘The Future of the Economic Torts’ (n 8) 14. To like effect David
Partlett, ‘From Victorian Opera to Rock and Rap: Inducement to Breach of
Contract in the Music Industry’ (1992) 66 Tulane Law Review 771, 773: ‘the
economic torts require a Cardozo or Atkin to tell them where they belong’.
185
Michaels v Taylor Woodrow Developments Ltd (n 109) 502 (Laddie J).
186
Fridman concluding ‘that factor [the unlawfulness of the defendant’s acts or
omissions] justifies the treatment of interference with another person’s trade,
business or economic interests as potentially … tortious’: G H L Fridman,
‘Interference with Trade or Business’ (Pt 2) [1993] Tort Law Review 99, 119
(‘’Interference with Trade or Business’ (Pt 2)’)
337
337
FLINDERS LAW JOURNAL [(2020
ruins a competing business. The heart of this tort is the unlawful nature
of the defendant’s behaviour. The notion of ‘unlawful’ should be given
its ordinary meaning. The courts have been reluctant to settle a
satisfactory meaning of ‘unlawful’ in this context,187 consistent with
more general reluctance to outline the parameters of this nascent
tort.188 It would embrace criminal behaviour, and breaches of statutory
obligations.189 It would include breaches of contract and commission
of a tort.190 It does not mean what a defendant is ‘not at liberty to
commit’,191 because that phrase is vague and uncertain in meaning.
The concept of ‘unlawfulness’ provides an important control
mechanism in relation to this tort.192
The courts should rationalize the position by basing the practical law on
intentionally caused loss rather than on the theoretically more restrictive
notion of causing such loss by unlawful means.194
187
‘Little effort has been made at judicial level to determine, or categorise, in even
the most general terms, the meaning of the term ‘unlawful’ in this context’:
Mitchell (n 141) 442.
188
Fridman, ‘’Interference with Trade or Business’ (Pt 2)’ (n 186) 103.
189
Daily Mirror Newspapers Ltd v Gardner [1968] 2 QB 762; Fridman,
‘’Interference with Trade or Business’ (Pt 2)’ (n 186) 107–10.
190
This is consistent with Rookes v Barnard (n 53).
191
Torquay Hotel Co Ltd v Cousins (n 40) 139 (Lord Denning MR).
192
‘[I]n the economic sphere … some deliberate harm may unquestionably be
caused … the common law should not, unless the law has itself outlawed the
means used, impose liability’: Weir (n 9) 77.
193
Fridman, ‘’Interference with Trade or Business’ (Pt 2)’ (n 186) 119.
194
Heydon, ‘Justification in Intentional Economic Loss’ (n 22) 177.
195
‘A person has a right to advance his own interests by lawful means even if the
foreseeable consequence is to damage the interests of others’: JSC BTA Bank v
338
338
21 FLJ 295] ANTHONY GRAY
D ‘Intentional’
Khrapunov [2018] UKSC 19, [10] (Lords Sumption and Lloyd-Jones for the
Court).
196
The Supreme Court noted in JSC BTA Bank v Khrapunov (n 195) that ‘the
successful pursuit of commercial self-interest necessarily entails the risk of
damaging the commercial interests of others. Identifying the point at which it
transgresses legitimate bounds is therefore a task of exceptional delicacy’: at [6]
(Lords Sumption and Lloyd-Jones for the Court). See also Perre v Apand Pty Ltd
(n 10) 299: ‘the market economy treats rivalry between participants as an
essential and defining feature; rivalry in which each participant seeks to
maximise its profit and market share at the expense of all other participants in
that market’.
197
I respectfully agree with Lord Nicholls in OBG Ltd v Allan (n 13) 53: ‘the gist of
this tort (of interference with trade or business by unlawful means) is
intentionally damaging another’s business by unlawful means. Intention is an
essential ingredient. The tort is not one of strict liability for harm inflicted on
another’s business … but intent to harm is not enough. Intentional harm of
another’s business is not of itself tortious. Competition between business
regularly involves each business taking steps to promote itself at the expense of
the other. One retail business may reduce its prices to customers with a view to
diverting trade to itself and away from a competitor shop. Far from prohibiting
such conduct, the common law seeks to encourage and protect it. The common
law recognizes the economic advantages of competition’.
198
‘[T]he concept of intention … provides the core justification for, and the
principal limit on, the intentional harm tort’: Sales and Stilitz (n 93) 425.
339
339
FLINDERS LAW JOURNAL [(2020
199
As noted above Mason JA in Sid Ross Agency v Actors and Announcers Equity
Association of Australia (n 180) acknowledged links between the tort of
intimidation and the tort of unlawful interference with business relations,
referring to whether the tort of intimidation was separate or not: at 766. This is
similar to the observation of Lord Hodson in Rookes v Barnard where he referred
to two historic decisions generally considered to be early examples of the tort of
unlawful interference with commercial interests, suggesting they might now be
considered examples of the tort of intimidation. ‘Intimidation has often been
taken as simply an example of a wider tort — intentionally causing loss by
unlawful means’: Heydon, ‘The Future of the Economic Torts’ (n 8) 6. Glasbeek
called the actions ‘analogous’: Glasbeek (n 51) 225. ‘The tort of intimidation
should be regarded as one example of this … tort [intentionally causing loss by
unlawful means]’: Sales and Stilitz (n 93) 435.
200
‘With respect to the other “industrial torts” [other than lawful means conspiracy]
it is obvious that the continued rise of the tort of “unlawful interference” should
lead to their increasing redundance’: Mitchell (n 141) 449.
201
Specifically s 45, which prohibits the making of an agreement with the purpose
or likely effect of substantially lessening competition, giving effect to such a
provision, and concerted practice with the purpose or effect of substantially
lessening competition. Section 45DA prohibits secondary boycotts; in other
words, it is unlawful for two organisations to engage in conduct which hinders
or prevents a third person from supplying goods or services, or acquiring goods
or services from a fourth party, for the purpose, and with the likely effect, of
substantially reducing competition. Section 45D similarly operates where the
340
340
21 FLJ 295] ANTHONY GRAY
conduct is committed for the purpose, and is likely to have the effect, of
substantially damaging the plaintiff. See also ss 45AF and 45AG with respect to
making an agreement containing a cartel provision and giving effect to such a
provision, respectively. Cartels might make an agreement in relation to price or
in relation to preventing or restricting the production, capacity to produce, or
supply of goods or services with the purpose and likely effect of substantially
lessening competition, acquisition of such good or service, or an agreement
concerning segmenting the market by customer or geographic location, or in
relation to bidding practices for work.
202
Further, the existence of the anti-competitive provisions in the Competition and
Consumer Act 2010 (Cth) does not obviate the need for reform of the common
law principles, because the common law principles apply to a much broader
range of conduct than that regulated by the legislation.
203
For example, witness the attempts by some judges to stretch the principle in
Lumley v Gye, known for the tort of inducing breach of contract, to cases where
there is in fact no contract and/or no breach: Temperton v Russell (n 34); Torquay
Hotel Co Ltd v Cousins (n 40) 138 (Lord Denning MR).
341
341
FLINDERS LAW JOURNAL [(2020
One sees again how easily a slight difference in the framing of the
embargo order [by the defendant] might have avoided incitement to
breach of contract, while still achieving a virtual cessation of the
plaintiff’s business. I cannot see it as a satisfactory state of the law that
the dividing line between what is lawful and what is unlawful should run
just along this contour. The essence of the matter is that the defendants
… decided to use the power of their control … to put the plaintiffs out of
business … when and upon what conditions they would be allowed to
resume their business was left in the air. In my opinion the law should
treat a resolution of this sort according to its substance, without the
comparatively accidental issue whether breaches of contract are looked
for and involved; and by its substance, it should be either licensed,
controlled or forbidden.206
204
‘The tort of inducing breach of contract rests upon, and is but a specific
application of, the broad general principle that to damage another intentionally
without justification or privilege is a tort’: Charles Carpenter, ‘Interference with
Contract Relations’ (1928) 41 Harvard Law Review 728, 735.
205
OBG Ltd v Allan (n 13) 24.
206
J T Stratford and Son Ltd v Lindley (n 38) 330.
342
342
21 FLJ 295] ANTHONY GRAY
207
‘[I]nterference with commercial relationships will be actionable if licence to
interfere with them would detract from the ability of free enterprise to flourish.
The question of liability can, therefore, not be determined by drawing artificial
distinctions between the interests violated on the basis that these interests are or
are not enforceable as contracts. Free enterprise is promoted by giving as many
people as possible as much opportunity as possible of entering into business
relationships with one another. Thus an interference with such an opportunity
might well give rise to a cause of action’: Glasbeek (n 51) 214.
208
Sanders v Snell (n 148).
343
343
FLINDERS LAW JOURNAL [(2020
(b) Remove the need for the fine distinctions made in the Bodycorp
case to be made209; and
(c) Would likely remove the cause of action for lawful means
conspiracy accepted by the court in Ballard v Multiplex.210
V CONCLUSION
This article has taken a contractual dispute as a catalyst for a broader
discussion of the economic torts. This is an area that is in an uncertain
state, and ripe for reform. It has been suggested that a court, preferably
a higher court, hearing a case involving one or more of these torts take
the opportunity to seriously consider reform. Firstly, it is argued that
the court should recognise that the tort of intentional, unlawful
interference with trade or business interests exists in Australian law.
Secondly, it should reconceptualise the economic torts around this
new organising principle. The existing torts of inducing breach of
contract, conspiracy and intimidation should be subsumed into the
new tort. This, together with the existing protection in Australian
statute for the kind of anti-competitive behaviour which society should
frown upon, would be an improvement to the law, breaking down
technicalities in favour of broader principles capable of application to
a broad range of cases, and providing a better balance between the
various interests involved in such disputes. The concepts of
unlawfulness and intent permeate the existing economic torts, and can
be used as control mechanisms for the reconceptualised version.
209
Bodycorp Repairers Pty Ltd v AAMI & Martin (n 158).
210
Ballard v Multiplex (n 168).
344
344