Explanation of Economic Torts in UK & Australia

CHANGE THE RULES: REFORM OF THE
ECONOMIC TORTS IN 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.
295
FLINDERS LAW JOURNAL [(2020
a tort is accepted into Australian law, whether it should trigger

consideration of broader reform of the economic torts in Australia. It
might do this because if the economic torts were in fact
reconceptualised, it might be on the basis that the tort of interference
with trade or business becomes the central organising principle,
around which the other existing torts would coalesce and merge.
Of course, these kinds of strategic re-alignments have occurred in

the past in tort law. Obvious examples are the recognition of a
generalised duty of care,4 subsumption of the principle of Rylands v
Fletcher (‘Rylands’)5 into the law of negligence,6 and
reconceptualisation of the law of public nuisance (highway cases) into
the law of negligence.7 It has been observed elsewhere that the
‘generalizing tendency of the twentieth century common law lawyer
has passed the economic torts by’.8 It is acknowledged the law has
long had ambivalence about and wariness towards recovery for purely
economic loss. This is primarily due to ‘floodgates’ concerns.9
It has required something more than reasonable foreseeability in

order to justify liability on such grounds.10 However, it has developed
principles to guide and constrain liability in this area elsewhere in tort
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
law.11 This article will suggest it is also possible to do so in the context

of a new tort of interference with trade or business.12 The House of
Lords undertook some re-alignment in 2007,13 though it is not
necessarily suggested Australian law reach the same conclusion, as
discussed below.
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
It is necessary to explain in some detail the development of the law

in ‘this area’. The area is that of the so-called economic torts, taken to
include the torts of inducing breach of contract, (possibly) that of
interference with trade or business, conspiracy, and intimidation. Of
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).
297
297
these four torts, a complication arises because it has commonly been

suggested the first is merely an illustration of the second, broader
tort.16 All four torts must be discussed in this article, because the
suggestion will be that one generalised economic tort, encapsulating
all of the existing economic torts, could and should be recognised. In
order to do that, it is necessary to understand the state of the existing
law.
Finally, by way of introduction, it should be remembered that many

of the cases discussed below were decided at a time when business
was less regulated by statute than today. In these earlier times, statutes
did not regulate anti-competitive practices.17 Those injured by such
practices would naturally resort to the common law for relief when
their business interests were being damaged by behaviour of their
competitors. Further, industrial activity was less regulated in the times
when these cases were decided than is the position today. Today,
strikes are generally unlawful except in particular circumstances.18
Finally, anti-discrimination laws today recognise the right of a person
to be a member, or not be a member, of a union. It is generally
unlawful to discriminate against someone because they are, or are not,
members of a union.19 These cases must be understood in their
historical context. That said, it is possible the tort action that they
recognise can be applied to different kinds of behaviour in the present
and future than the circumstances that originally animated them, and
it might be that they can be reconceptualised into one tort.
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
In Part II of this article, I explain developments in the United

Kingdom. I have done this as succinctly as possible, but it is
considered necessary to discuss in some depth the stages of evolution
of the law in that jurisdiction, seeing what can be learned, before
offering a critique of it. In Part III, I consider how these principles
have been applied in Australian courts. Australian law is at a lesser
stage of development, with fewer cases, but with some large questions
remaining unanswered. In Part IV, I suggest specific reforms to
Australian law, in light of the United Kingdom experience.
This article aims to build from the impressive scholarship in this

field to date. Specifically, it seeks to build on the work of Deakin and
Randall in suggesting a rationalisation of the economic torts, though it
seeks to bring them together more fully than Deakin and Randall
suggested.20 It is more ambitious than the thoughtful work of Carty,
who believed that development of one of the economic torts might in
time influence others.21 It embraces her noting of the need for strong
control mechanisms in this area of the law, to keep it manageable, and
specifically notions of intention and unlawfulness. In this respect it
differs from the view of Heydon, who advocated liability based on the
former (only).22 Those first two works were also understandably very
concerned with the OBG Ltd v Allan (‘OBG’) decision, appearing
quite soon after it. This article seeks to take a longer lens, considering
in depth the development of this area of the law since its inception,
and including a consideration of the Australian position upon which
the authors just mentioned were (understandably) not concerned. It
will also build on the work of others such as Weir and Stewart who
have suggested specific recognition of a tort of causing loss by
unlawful means.23 It will go further by seeking a rationalisation of the
full range of economic torts.
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
299
II DEVELOPMENTS IN THE UNITED KINGDOM
A Tort of Inducing Breach of Contract
The tort that we would today recognise as that of inducing breach of

contract has a long history in the law. It originated in the action the
head of a household would have for loss of others living with them
(for instance a family member, or an employee) through the actions of
another.24 The law recognised the household head had an action
against the wrongdoer. This doctrine had roots in the Roman law
doctrine of actio iniuriarum. It was originally confined to cases where
violence had been used against the household member. Then came the
Ordinance of Labourers in 1349, requiring those under 60 to work,
and providing a remedy for employers in cases where employees left
employment. It also punished those who took on employees who had
abandoned their previous workplaces. In this case, proof of violence
against the employee was not necessary. It was enough that the
defendant had taken on the employee, knowing they were employed
elsewhere. Originally these actions were enforced as trespass, the
employee seen as the property of the original employer,25 but by the
late 18th century they were recognised as actions on the case. The
requirement of violence had been abandoned, but the doctrine was
confined to cases of employer and employee (ie, a contract of service).
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
Economic Torts and Anti-Secondary Boycott Laws in Australia’ (PhD Thesis,

RMIT, 2017).
24
Francis Bowes Sayre, ‘Inducing Breach of Contract’ (1923) 36 Harvard Law
Review 663, 664–7; G A Owen, ‘Interference with Trade: The Illegitimate
Offspring of an Illegitimate Tort?’ (1976) 3 Monash University Law Review 41.
25
Anonymous (1409) Y B 11, Henry IV, f 23, P1 46; Bird v Randall (1762) 3 Burr
1345; 97 ER 866, 867.
26
Lumley v Gye (n 16).
300
300
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.
So in Bowen v Hall (‘Bowen’),31 the High Court expanded on the

elements, referring to a need to show the defendant had knowledge of
the contract between the plaintiff and the employee, that the defendant
acted to secure an advantage for themselves at the expense of the
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
301
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
The courts have interpreted the requirement of knowledge liberally.

For example, in J T Stratford and Son Ltd v Lindley (‘J T Stratford and
Son Ltd’) the case involved action for inducing breach of contract
when a union directed members not to tow particular barges, meaning
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
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).
This issue was resolved by the House of Lords in OBG Ltd v

Allan.43 There the court accepted the separate torts theory; the Lumley
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
303
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
Lord Hoffmann in OBG confirmed that it was necessary, to

successfully sue on the basis of Lumley v Gye, that the plaintiff prove
the defendant intended to cause breach of contract, though it was not
necessary the plaintiff show the defendant intended to cause them
damage.45 It was irrelevant that the intent behind causing the breach
was another end. In relation to intention, it was not sufficient the result
was merely foreseeable. Knowledge by the defendant that they would
cause the breach was required. It was not enough that a reasonable
person would be aware of the likelihood of this. But a defendant could
not escape liability by wilfully turning a blind eye to the consequences
of their actions.46 This requirement sits somewhat uncomfortably with
earlier statements by the House of Lords that individuals are taken to
have intended the reasonable consequences of their actions.47 On the
one hand it is said it is not sufficient to attract liability that damage to
the plaintiff was reasonably foreseeable; later the court accepted that
intention (a required element) could be deduced from reasonable
foreseeability.
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
In summary, this tort has expanded significantly in scope since its

original inception. A previous limit to acts of violence was removed.
Its confinement to contracts of employment was removed, when it was
first extended to contracts for services, and then any contract. Then its
supposed requirement of malice was jettisoned. Subsequently it was
suggested that it could apply to cases where there was no breach of
contract at all.48 Today, the control mechanism is the question of the
defendant’s intent to cause the breach of contract, which has been quite
stringently applied, together with proof they actually did cause the
breach of contract. The relation between this tort and the one presently
to be discussed was contentious for more than a century, but the House
of Lords eventually decided on the separate torts theory.
B Tort of Interference with Trade or Business or of Causing Loss

by Unlawful Means
In a different line of cases, early decisions had suggested unlawful

behaviour by a defendant that damaged a plaintiff could be actionable,
although no breach of contract was involved. One instance is Garret v
Taylor (‘Garret’).49 There the defendant threatened customers and
employees of the plaintiff, demanding they no longer do business with
them. The Court found this was an actionable wrong. This may have
been an early instance of the tort of intimidation, though it was not
described as such in the case. The word ‘hinder’ was used to describe
the circumstances to which the nascent action might apply. Holt CJ in
Keeble v Hickeringill (‘Keeble’) stated ‘he that hinders another in his
trade or livelihood is liable to an action for so hindering him’.50 There
was no qualification regarding whether the defendant’s actions were
lawful or wrongful.51 There was no requirement that a third party be
involved.
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
305
A further example is Tarleton v M’Gawley (‘Tarleton’),52 involving

the defendant firing cannons at would-be customers of the plaintiff,
seeking to ‘hinder and deter trade’. The Court held this was an
actionable wrong. Again, modern eyes might recognise the tort of
intimidation, though that tort was not recognised as such at this time.
The kind of behaviour that might attract this tort was imprecise  it
was not known whether the defendant had to be acting unlawfully, and
how this would be defined.
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.
Courts suggested overlap between the nascent tort and that of

inducing breach of contract.53 This appears in the judgment of Erle J
in Lumley v Gye, and subsequently in Bowen v Hall where it was again
suggested the Lumley v Gye action could include damage to another in
a business context in circumstances other than inducing a breach of
contract. In other words, the Lumley v Gye line might effectively
subsume the nascent tort of unlawful interference with business
interests established in cases such as Garret, Keeble and Tarleton; or
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
alternatively, that Lumley v Gye was a subset of a broader principle.

Either way, the suggestion was that it was really one tort, not two.
This suggestion of a broader principle also occurred in Mogul

Steamship Co Ltd v McGregor, Gow & Co (‘Mogul Steamship’),54
where the defendants engaged in sharp business practices to shut out
the plaintiff. This included lowering rates to make the plaintiff’s
business unviable, and pressuring others not to provide services to the
plaintiff. The plaintiff’s legal claims were dismissed. The Court found
the defendants had not engaged in unlawful or wrongful behaviour.
They had not induced anyone to breach any contract. However, two
members of the House of Lords suggested mere proof of malice in
actions taken against a business competitor might ground a cause of
action.55 This was similar to a statement of Bowen LJ in that case in
the Court of Appeal,56 and subsequent decisions of that Court.57
Matters came to a head in Allen v Flood (‘Allen’).58 The case

involved employers who had engaged two particular workers on a
casual basis. A union delegate objected to use of the workers, because
they objected to workers with their trade background doing this
particular work. The delegate told the employer if they did not cease
to employ the workers, other workers would take strike action. As a
result, the employer terminated the services of the two workers. It was
accepted the workers could be dismissed at will; the employer did not
breach any contractual provision by terminating them. Thus, a Lumley
v Gye action could not lie, since the union had not induced breach of
contract between employer and employee. Nevertheless, the dismissed
workers sued the union alleging malicious behaviour, conspiracy,
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
307
intimidation and breach of contract. A majority of the Court rejected

the claim.
The majority rejected suggestions made in Mogul Steamship in the

Court of Appeal and House of Lords that a malicious act that damaged
another in business could, without more, found a legal action. The
majority view in Allen was that ‘malice’, however interpreted or
defined, could not turn what was otherwise a lawful act into an
unlawful one.59 The majority viewed the question of conspiracy as a
possible exception (see below).
Lord Watson said there were two circumstances where a defendant

who procured the act of another could be made legally liable for the
consequences: (a) they knowingly and for their own ends induce
another to commit an actionable wrong; or (b) they induce another to
unlawfully breach their contract with a third party (Lumley v Gye
action).60 Again, this recognises two torts, rather than one. Others in
the majority agreed it was necessary that the defendant had engaged
in a recognised legal wrong in order for a plaintiff claiming to have
suffered damage from their actions to obtain compensation against
them.61 The mere fact that the defendant’s actions had the effect of
interfering with another’s trade, business or employment was
insufficient.62 This was why they found in favour of the defendant. In
contrast, the dissentients held the plaintiff should succeed because the
defendant had ‘maliciously and wrongfully, with intent to injure the
plaintiffs’, coerced the employer to dismiss the workers.63 It was not
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
clear whether the tort was confined to cases involving actions of third
parties, though those were the facts in Allen v Flood.
Despite Allen v Flood, judges continued to suggest that Lumley v

Gye was not a decision limited to cases of procuring a breach of
contract by another, but was of broader application. In Quinn v
Leathem,64 primarily a conspiracy case, Lord Macnaghten discussed
Lumley. He said the decision was correct because, and stood for the
principle that, ‘violation of legal right committed knowingly is a cause
of action’.65 Lord Lindley agreed it was correctly decided, noting the
‘principle which underlies the decision reaches all wrongful acts done
intentionally to damage a particular individual and actually damaging
him’.66 Similar comments appear in Jasperson v Dominion Tobacco.67
These comments suggest a broader scope for liability than what was
envisaged by the majority in Allen v Flood just a few years prior. They
suggest Lumley should be seen as part of the broader principle of
causing a business loss by unlawful means.
The impact of Lumley was subsequently broadened in another way,

again effectively raising the question whether it was a sub-set of a
larger and more general principle. In decisions primarily involving the
Lumley v Gye line, judges relaxed the requirement of a breach of
contract.68 This occurred in Torquay Hotel Co Ltd v Cousins
(‘Torquay Hotel’),69 where at time of judgment no breach of contract
had occurred. A further complication was that a frustration clause in
the contract might have applied if contract performance were
prevented, leaving it open to differing interpretations as to whether in
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
such a case the defendant that prevented performance had induced

‘breach’. Lord Denning MR accepted a broader tort, stating:
I have always understood that if one person deliberately interferes with

the trade or business or another, and does so by unlawful means, that is,
by an act which he is not at liberty to commit, then he is acting unlawfully,
even though he does not procure or induce any actual breach of contract.
If the means are unlawful, that is enough.70
Lord Denning’s judgment followed obiter by members of the

House of Lords in J T Stratford and Son Ltd questioning the need for
a breach of contract to be established in order for a plaintiff to succeed
against a defendant for interference with contractual arrangements.71
Effectively, this reasoning subsumes Lumley into the broader tort of
wrongful interference with contractual relations.72 These
developments in United Kingdom law were noted by Mason J in
Kitano v Commonwealth.73 By 1983 the House of Lords recognised a
tort of ‘actionable interference with contractual rights’ in
circumstances other than a breach of contract.74 In 1997 in his
Clarendon Series lectures, Tony Weir concluded ‘the tort of inducing
breach of contract has now been absorbed into the general tort of
causing harm by unlawful means’,75 as he described the tort.
The opportunity arose for the House of Lords to re-consider the

relation between this line of authority and Lumley v Gye. In OBG v
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
Allan,76 different views were expressed as to the requirements for the

tort to be shown, reflecting differences in opinion regarding its ambit.
It was rebadged from a tort of ‘actionable interference with contractual
rights’ to causing loss by unlawful means, as Weir had called it, to
distinguish it from Lumley v Gye.
Lord Hoffmann, with whom others agreed, confirmed two elements

needed to be shown to successfully sue for the tort of causing loss by
unlawful means: (a) wrongful interference with the actions of a third
party in which the plaintiff has an economic interest; and (b) intention
to thereby cause loss to the plaintiff.77 The actions would have to be
‘wrongful’ in the sense the third party could take action regarding
them (ie actionable), or could except for the fact they had not suffered
loss. This requirement places the wrongful means tort in conflict with
other economic torts such as conspiracy78 and intimidation,79 where
this is not required.
Lord Nicholls agreed with requirement (b) regarding proof of

intention to cause loss to the plaintiff, adding it was a strict test to
satisfy. It was not sufficient that it was reasonably foreseeable that the
plaintiff would suffer loss.80 However, his conception of the first
element was broader than that of the others. He said the first element
comprised all acts a defendant was not permitted to commit, whether
by the civil or criminal law.81 He rejected as overly narrow Lord
Hoffmann’s suggestion that the tort was limited to cases where the
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
81
Ibid.
311
311
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.
C Reflections on the United Kingdom Developments Regarding

These Torts
Wisdom is more attainable with the benefit of hindsight. The courts

have strained to expand the principle of Lumley v Gye well beyond its
original bounds. The decision itself was a significant expansion of its
historical roots. Then subsequently to the decision, it was found
necessary to expand its principles still further, to include the non-
employment context, and cases where no breach of contract actually
occurred, such as hindering performance, or preventing contracts
being finalised.83 It is submitted that rather than stretch the already
stretched tort of inducing breach of contract to something
unrecognisable and significantly removed from its historical roots, it
may have been better for the courts to have developed the tort of
causing damage to another’s business or commercial interests through
unlawful means. This tort would have been broad enough to
encompass Lumley v Gye and subsequent decisions, provided it was
accepted that breach of contract, including being an accessory to such,
should be properly considered ‘unlawful’. This path was not taken.
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
have been applied in a Lumley v Gye situation, though it was not

legally incorrect for the court to expand the previous precedents in the
employment context regarding interference with employment
relations. The court should have seized the opportunity in Lumley to
merge the two lines of authority. It should have merged them into a
tort of unlawful intentional interference with commercial interests; in
other words, the tort of unlawful intentional interference should have
been applied to resolve Lumley v Gye. This is what Tony Weir
suggested, post-facto.84 Formulated this way, it would have been
sufficiently broad. It would have avoided the need for subsequent
courts to (controversially) try to expand Lumley v Gye beyond
recognition.
Again, the House of Lords had an opportunity to rationalise these

torts in OBG.85 However, rather than merge them, it insisted they were
separate torts. It did recognise the tort of unlawful, intentional
interference with commercial interests. However, four of the five
Lords limited such action to wrongful interference through the actions
of a third party.86 It is not clear in principle why the tort should be so
confined. Certainly, some of the precedent, including Allen v Flood,
suggested it. On the other hand, Keeble v Hickergill, recognised as a
case of causing loss by unlawful means, did not involve damage
through a third party. While other cases of that period, Garret v Taylor
and Tarleton v M’Gawley, did, the cases do not expressly turn on that
fact. Statements by Lords Lindley and Macnaghten in Quinn v
Leathem do not express this limitation. When the High Court of
Australia expressed the cause of action in Brisbane Shipwrights’
Provident Union v Heggie (‘Brisbane Shipwrights’),87 (discussed
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
below) it did not require the defendant’s behaviour involve a third

party. This has been noted by commentators.88
Respectfully, the formulation of Lord Nicholls, requiring an

unlawful act by the defendant but not limiting it to cases involving
third parties,89 is preferred. He suggested the two views of the
unlawful interference tort were based on different perceptions of its
rationale. One rationale, which he favoured, was that the tort curbs
‘clearly excessive conduct. The law seeks to provide a remedy for
intentional economic harm caused by unacceptable means …. [and]
regards all unlawful means as unacceptable in this context’.90 The
other rationale for the tort was merely to provide a claimant with a
remedy where intentional harm was inflicted indirectly not directly.91
This rationale assumes where intentional harm is inflicted directly, the
plaintiff will have another remedy available. However, this
assumption is misplaced. Most judges accept the mere fact a defendant
intentionally harmed the plaintiff does not, without more, ground legal
action. Lord Nicholls rejected this second rationale for the tort as a
‘radical departure from the purpose for which this tort has been
developed … [bringing] about an unjustified and unfortunate
curtailment of the scope of this tort’.92 With respect, I agree. This view
also enjoys academic support.93
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
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
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.
The second reason was the Court’s statement that ‘unlawfulness’

for the purposes of the unlawful means tort ‘requires the use of means
which are unlawful under some other rule’.97 No authority is cited.
Again, no reason of policy of which the author is aware would require
this in respect of the unlawful means 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
315
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
Gye action.103 However, it is not a large step, when knowledge of the

existence of the contract is required in Lumley cases, for a defendant
to know as a result that breach of the contract is extremely likely, at
least, to cause the plaintiff loss. The difference between the two
actions in this respect is not great.
Lord Hoffmann also criticised the distinction between direct and

indirect interferences in the current case law, giving it as a further
reason for abandoning the unified tort theory.104 It is agreed the
distinction is problematic,105 but if we adopt a general tort of
intentional, unlawful interference with business interests, that
distinction becomes redundant. Extra-judicially, Lord Hoffmann
explained OBG as an attempt to confine the economic torts ‘as
narrowly as possible’ given their slim basis in social or economic
policy, so they would become torts ‘of little practical consequence’.106
Carty contrasts these attempts by the House in OBG to clamp down on
action for causing loss by unlawful means with liberal growth of the
tort of conspiracy, in a way which could undermine the apparent
agenda of the court. She suggests, in time, the liberal approach to
conspiracy may ‘crossover’ to the tort of causing loss by unlawful
means, removing shackles placed on it in OBG.107 Deakin and Randall
point out the apparently anomalous distinction between the
requirements of the tort of unlawful means and the tort of intimidation,
to be discussed presently. In the case of the former, the House of Lords
found in OBG it was necessary to show the wrong complained of was
actionable by a third party. However, for the tort of intimidation, the
House found it was not necessary the acts complained of were
actionable by another party wronged, because the actions were
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
separate.108 Similarly, in the year after OBG in Revenue and Customs

Commissioners v Total Network SL, the House found third party
actionability was not required with respect to the tort of conspiracy, to
be discussed below. This creates an anomalous situation with the
family of economic torts, where third party actionability is required
for the tort of unlawful means, but not for conspiracy, intimidation, or
inducing breach of contract. Deakin and Randall, discussing this,
conclude ‘this is a result with which nobody concerned with doctrinal
coherence in tort law can feel particularly happy’.109
D Conspiracy and Intimidation
Classically the courts have considered an unlawful conspiracy to be

the intention of two or more, and in the agreement of two or more, to
do an unlawful act, or to do a lawful act by unlawful means.110
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
industrial relations issues. A contract existed between the plaintiff and

Munce.
This case was decided based on the tort of conspiracy. Members of

the House of Lords noted the defendant unionists had acted in concert,
not to advance their own interests as workers, but purely to injure the
plaintiff. This was unlawful. They distinguished Allen v Flood on the
basis that there, the defendants were acting to promote their own trade
interests. Here, the defendants were not so acting. They damaged the
plaintiff’s legitimate trade and business interests, without lawful
justification. Lord Lindley said a conspiracy to prevent others from
working by pressuring them not to do so was unlawful.113
There can be a fine line between an unlawful actionable conspiracy,

and legitimate protection of business interests. For example, the Court
dismissed a complaint against a motor industry association.114 The
association compiled a list of fixed prices for their goods, telling
members that they must sell their goods within this agreed range. The
association’s rules provided that if there were evidence that someone
was selling goods outside this range, they could be placed on a ‘black
list’. If someone were so placed, association members would not do
business with them. The plaintiff was so placed for listing a motor
vehicle at a price beyond the range. Association members refused to
deal with him, seriously damaging his business. The Court rejected
allegations of unlawful conspiracy against the plaintiffs; the
defendants were acting in good faith to protect legitimate business
interests.115 Recall the House of Lords in Allen v Flood, in determining
that the motivation for given actions could not determine whether or
not they were lawful, expressly suggested that the tort of conspiracy
might be an exception to that rule.116
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
Similarly in Sorrell v Smith,117 an association of retail newsagent

outlets determined there were sufficient outlets in a given area. They
determined to act against any wholesale newsagent that dealt with new
retail newsagents in the area, by refusing to purchase product from that
wholesaler. The Court rejected a conspiracy claim, because the
defendants were pursuing legitimate business interests in a reasonable
manner, and had not set out to injure the plaintiff. Lord Dunedin
stressed the importance of evidence of intent to injure the plaintiff in
cases of alleged conspiracy,118 though practical difficulties were
acknowledged.119
Eventually, the United Kingdom courts would distinguish in this

context acts that were lawful and those that were unlawful. In respect
of lawful acts, conspiracy would be actionable as a tort only where the
predominant or main purpose of the combination was to damage the
plaintiff.120 It was logically necessary to place the bar this high,
because the law was effectively making it wrong to do something that
would, if done individually, not be tortious. In contrast, where the
action/s concerned were unlawful, it was only necessary to show that
117
Sorrell v Smith (n 116).
118
Ibid 719. Similarly: at 712 (Viscount Cave LC, Lord Atkinson agreeing), 741–2
(Lord Sumner), 749 (Lord Buckmaster). It has been said that intention to injure
does not need to be accompanied by maliciousness: Crofter Hand Woven Harris
Tweed Co Ltd v Veitch [1942] AC 435, 470–1 (Lord Wright). The action did not
lie against a union that had ordered a strike, because the Court found that the
union was seeking to act in what it thought were the best interests of its members,
and did not intend to damage the plaintiff: J T Stratford and Son Ltd v Lindley (n
38) 323 (Lord Reid).
119
Lord Sumner reflected on the difficulties in determining the defendant’s intent:
Sorrell v Smith (n 116) 742. Dissatisfaction is also evident in the judgment of
Viscount Maugham in Crofter Hand Woven Tweed Co Ltd v Veitch (n 118):
‘some [Lords] … have used phrases which seem to suggest that once it is found
that the infliction of injury on the petitioners was not the real purpose or object
of the embargo that is the end of the matter. I must say plainly that I disagree
with this view’: at 448–9; calling it a ‘mistake to hold that combinations to do
acts which necessarily result in injury to the business or interference with the
means of subsistence of a third person are not actionable provided only that the
true or predominant motive was not to injure the plaintiff and that no unlawful
means are used’: at 451.
120
Lonrho Ltd v Shell Petroleum (No 2) [1982] AC 173, 188–9 (Lord Diplock for
the House); Lonrho plc v Fayed [1992] 1 AC 448, 465–6 (Lord Bridge for the
House).
320
320
the combination had at least one purpose of damaging the plaintiff.

Setting of the bar at this lower level was justified because the
defendant/s were engaged in ‘unlawful’ behaviour, however
defined.121
Carty contrasts the broad modern application of the tort of

conspiracy with the narrow constraints in which courts have typically
placed the unlawful means tort. She says the broad interpretation of
the conspiracy tort can effectively undermine these constraints, so that
in time courts might then loosen the constraints they have placed on
the unlawful means tort.122
In Rookes v Barnard123 the House of Lords recognised the tort of

intimidation. This tort was established when the defendant threatened
to commit an unlawful act and intended to cause the plaintiff loss. The
tort was made out on the facts, which involved union members
threatening the plaintiff’s employer that if they did not dismiss him,
they would call a general strike which would seriously impact the
employer’s business. The Court determined this was a threat to
commit an unlawful act, that of breach of an employment agreement,
and the defendants intended to cause the plaintiff loss. Again, the
relation between this tort and the tort of causing loss by unlawful
means is unclear. The Court in OBG did not expressly subsume this
tort into the tort of unlawful means. However some commentators
claim that the Court treated the tort in Rookes v Barnard as being ‘the
same’ as that of causing loss by unlawful means.124
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
In sum, the United Kingdom law in relation to the economic torts

is unsatisfactory because the principles applicable to the various torts
are inconsistent and in conflict, without good reason. Originally, the
principle of Lumley v Gye was stretched beyond recognition, in a
strained effort to fit a broader range of cases within its narrow
boundaries. Numerous courts have suggested it would be better to
view Lumley as part of a broader principle. This connection was
rejected by the House of Lords in OBG. There the House attempted a
partial rationalisation of the law in this area, but its efforts were
unsatisfactory. It did not provide strong reasoning for insisting that
Lumley should remain separate from a broader tort, and it did not
reconcile the Lumley tort and the tort of causing loss by unlawful
means with the torts of intimidation and conspiracy. Its framing of the
causing loss by unlawful means appears to have been motivated by a
desire to drive it out of the law of torts, or at the very least marginalise
it, for unexplained reasons. Lumley should have been seen as an
example of the tort of causing loss by unlawful means.
III DEVELOPMENTS IN AUSTRALIAN LAW
A High Court Decisions
The High Court considered itself bound by decisions of the House of

Lords, which decided most of the above cases, until 1963.125 It is
interesting to see how Australian courts have applied the legal
principles stated above, and to what extent they have followed the
(somewhat tortuous) path taken by United Kingdom law in this field.
This discussion informs later law reform suggestions.
The first High Court decision was in 1906 in Brisbane Shipwrights’

Provident Union v Heggie.126 The timing was unfortunate, occurring
just after the tumultuous turns of United Kingdom law in the era of
Allen v Flood and Quinn v Leathem. The case concerned an employee
125
Parker v The Queen (1963) 111 CLR 610.
126
Brisbane Shipwrights’ Provident Union v Heggie (n 87).
322
322
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
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
In James v Commonwealth,131 Dixon J considered both the

suggested tort of interference with business interests, and the Lumley
v Gye tort. He expressed a narrower view of the first, rejecting
suggestions in cases like Keeble v Hickeringill, Mogul Steamship and
Temperton v Russell that it could exist independently of proof the
defendant had committed a wrongful act.132 He recognised the tort of
conspiracy as an exception to this position, as the United Kingdom
court had in Allen v Flood.133 Dixon J, presumably influenced by the
United Kingdom decisions, expressed a broader view of Lumley. He
found ‘the principle to which Lumley v Gye is now referred is no doubt
wide enough to include within its protection civil rights which exist
independently of contract’.134 He added that uncertainty continued to
surround the requirements of that tort, but it was clear that the
defendant had to be aware of the ‘civil right’ and act without lawful
justification.135 Dixon J indicated a possible defence to a Lumley v Gye
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
action where the defendant had acted honestly and reasonably in

pursuit of a legitimate interest.136
He quoted with approval an extract from a leading torts text written

by Salmond, where the author stated that mere advice was not
actionable; rather, an inducing cause or reason to breach the contract.
The distinction was between inducing a contract in terms of creating a
reason for breaking it, and to advise a breach of contract, meaning to
point out reasons which already existed.137
The High Court recognised a new tort in Beaudesert Shire Council

v Smith (‘Beaudesert’).138 The plaintiff had rights to take water from a
nearby river. His rights were compromised when the appellants took
gravel from the river bed, altering the flow of the river in a manner
detrimental to the plaintiff. The plaintiff sued the Council. The High
Court found for the plaintiff. It expressly referred to the English
authorities referred to above, namely Garret v Taylor, Tarleton v
M’Gawley, and Keeble v Hickeringill. It did so in establishing a new
principle that:
Independently of trespass, negligence or nuisance but by an action for

damages upon the case, a person who suffers harm or loss as the
inevitable consequence of the unlawful intentional and positive acts of
another is entitled to recover damages … it may be that a wider
proposition could be justified, but the proposition we have stated covers
this case.139
The decision was much criticised.140 There were several puzzling

aspects to it, including why the Court found the need to utilise the
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
concept of ‘inevitable consequence’ since none of the English

authorities cited by the Court had. It was not entirely clear why
negligence could not have been utilised, although the fact the
defendant’s actions were ‘intentional’ might have been relevant, and
that tort was more modest in scope than today. There was no evidence
the council acted maliciously to deliberately harm the plaintiff.141 The
Council’s actions were certainly voluntary, but this falls well short of
a finding they intentionally damaged the plaintiff’s interests, and it is
difficult to frame an action around voluntariness. One might have
thought something extra, like intention to harm the plaintiff, might
have been necessary.142 In terms of other torts, the plaintiff perhaps
lacked a claim in nuisance since there was no damage to their property
interests per se, as opposed to a right to draw water from a Crown-
owned watercourse. A Rylands claim was also not possible, since there
was no ‘escape’ from land owned by the council.
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
347; Gerald Dworkin, ‘Intentionally Causing Economic Loss – Beaudesert Shire

Council v Smith Revisited’ (1974) 1 Monash University Law Review 4.
141
R J Mitchell, ‘Liability in Tort for Causing Economic Loss by the Use of
Unlawful Means and its Application to Australian Industrial Disputes’ (1976)
5(4) Adelaide Law Review 428, 452.
142
‘It is clear that Beaudesert, in so far as it represents a generalised principle of
economic tort liability, is wrong and that intention to harm the plaintiff must be
established’: Stewart (n 23) 369; Heydon, ‘The Future of the Economic Torts’ (n
8) 16–17.
143
Northern Territory v Mengel (n 7).
144
Indeed, there was apparently a suggestion that the Beaudesert principle and the
tort of wrongful interference with trade and business were analogous, with the
High Court in Beaudesert quoting the United Kingdom decision in Mogul
Steamship in support of the principle it recognised in Beaudesert: Beaudesert
Shire Council v Smith (n 138) 155–6 (Taylor, Menzies and Owen JJ); Kitano v
Commonwealth (1974) 120 CLR 151, 174 (Mason J). However, the concept of
‘inevitable consequence’ which appears in the Beaudesert principle does not find
support in the Mogul Steamship decision.
326
326
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.
The judgment in Mengel was made on other grounds,145 but the

Court made obiter comments on the tort of inducing breach of contract
or, as the High Court re-phrased it in Mengel, ‘intentional interference
with contractual rights’. It observed in respect of the United Kingdom
case law that a liberal approach had been taken to questions of proof
of intention; it was not necessary the intent to injure another be
predominant, it was sufficient that the defendant had constructive
knowledge of the contract breached, and sufficient if the defendant had
‘recklessly disregarded’ means of ascertaining the terms of the
contract.146 It also noted an emerging tort in the United Kingdom of
interference with trade or business interests by an unlawful act. It was
not clear what ‘unlawful’ encompassed, but it was not necessary they
be done to damage the plaintiff’s interests.147 The joint reasons
expressed no view as to whether these developments should be
accepted in Australian law.
Both torts of inducing a breach of contract and unlawful

interference with trade or business were considered in Sanders v
Snell.148 There a government minister decided the contract of a
particular office holder should be terminated, and directed his
department to that effect, asking them to terminate it as soon as
practical. The contract was terminable on conditions, but it was argued
termination had not occurred on those conditions. The High Court
narrowly viewed the tort of inducing breach of contract:
The tort of inducing or procuring a breach of contract is not established
by demonstrating only that the alleged tortfeasor hoped or wished that the
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
contract would or might be breached. To establish an inducing or

procuring of breach, something more must be shown than that the alleged
tortfeasor harboured an uncommunicated subjective desire that the
contract would or might be breached.149
The Court declined to determine whether the tort of unlawful

interference with trade or business interests existed in Australia.150
However, the joint reasons accepted the possibility of it, by
commenting on whether it required the actions complained of to be
unlawful, and what was meant by ‘unlawful’.151 It did not refer to
earlier decisions like Brisbane Shipwrights and James v
Commonwealth which discussed the tort of unlawful interference with
business interests. The issue was considered briefly in Zhu v Treasurer
of New South Wales.152 There the Court referred to a ‘tort of
contractual interference’ and referred with apparent approval to the
judgment of Dixon J in James v Commonwealth, discussed above, in
which both torts were recognised, without elaboration.153
B Most Recent Australian Lower Court Decisions
1 Tort of Inducing Breach of Contract
Subsequent decisions have basically applied the above principles. It is

not sufficient that breach of contract was a foreseeable consequence
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
of the defendant’s activities.154 It is not enough that the defendant’s

activity caused the breach, in the absence of the mental element of
intention/knowledge.155 However, evidence the defendant turned a
‘blind eye’ to the possibility their behaviour would or might induce a
breach of contract may be sufficient, as may reckless indifference.156
The courts have applied the distinction of Dixon J in James v

Commonwealth, based on Salmond, between inducement of breach of
contract and advising a breach of contract.157 On occasion, these
requirements have been applied narrowly. In Bodycorp Repairers Pty
Ltd v AAMI & Martin (‘Bodycorp’),158 the Victorian Court of Appeal
was not satisfied they were met when the defendant openly questioned
with the contracting party whether it was in their best interests to
remain with their present contract. The Court accepted the evidence
which suggested the defendant would have been happy for the
contracting party to exit their existing contract. The defendant said the
contracting party may in future obtain more work if they exited their
existing arrangements. In dismissing the claim for inducing breach of
contract, the Court applied the distinction in James v Commonwealth
between inducing a breach of contract, meaning to create a reason for
breaking it, as opposed to advising a breach of contract, which was to
point out reasons which already existed. Dixon J said the former was
actionable; the latter was generally not. With respect, the defendant’s
conduct in Bodycorp was more like an inducement to breach, rather
than advising a breach. In the express language of Salmond, adopted
by Dixon J, it ‘created a reason for breaking it’, in terms of a promise
of more work in future. It was not to (merely) point out reasons which
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
already existed. It has been stated that ‘procuring’ means ‘persuading

with effect’.159 One would have thought that telling a party to a
contract they will/may get more work once they have exited the
contract might be, and might be designed to be, highly persuasive.
Interestingly, some of these cases have made extensive reference to
the House of Lords decision in OBG in framing the parameters of the
tort of inducing breach of contract. As was noted above, it was there
that the House recognised the tort of unlawful interference with
business interests as separate from that of inducing breach of contract.
2 Possible Wider Tort of Unlawful Interference with Business or

Commercial Interests
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.
Some lower courts have thought it better to avoid the issue,

declining to decide until the High Court does so. This is not surprising,
since the High Court has earlier expressed concern with a lower court
reforming the common law, on the basis it was the High Court’s
responsibility to do so.162 It is hard to disagree with this, but it
presupposes willingness on the High Court’s part to determine
contentious points of law. On occasion, respectfully, the High Court
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
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.
A recent example of a court leaving open the question of the

possible new tort is the Victorian Court of Appeal in CFMEU v Boral
Resources (Vic) Pty Ltd (‘CFMEU’):167
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
In contrast, some lower court judgments support adoption of the

tort of unlawful interference with business interests. In Deepcliffe Pty
Ltd v Council of the City of Gold Coast,169 President of the Queensland
Court of Appeal McMurdo accepted its existence for the purposes of
argument. The question was closely considered by Pritchard J in
Hardie Finance Corporation Pty Ltd v Ahern (No 3).170 That judge
accepted the unlawful means tort was part of Australian common law.
Pritchard J considered arguments in favour of and against recognition.
In favour was the fact some lower courts in Australia had recognised
it, the arguments presented in OBG for recognition of the tort were
persuasive, the High Court’s statements in this area to date had not
expressed concern with developments in the United Kingdom law and
there was nothing inconsistent between statements in the Australian
cases and the United Kingdom position, there was no concern
recognition of the new tort would lead to indeterminate liability, the
highest decisions in the United Kingdom courts remained highly
persuasive in Australia, and Canadian courts had also adopted the
House of Lords decision in OBG.171
Pritchard J noted reasons to be wary about recognising the tort

included the High Court had previously declined to so decide when
asked, to some extent it might be inconsistent with the High Court’s
general reluctance to permit recovery for economic loss in tort,
economic activity had already been the subject of extensive statutory
regulation, and the meaning of the elements of the tort determined in
OBG needed further clarification. On balance Pritchard J adopted the
tort. That decision was not referred to when the Victorian Court of
Appeal subsequently declined in CFMEU to determine whether the
tort was part of Australian law. Others suggest Australian law will
accept the new tort.172
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
3 Tort of Conspiracy and Tort of Intimidation
The High Court recognised the tort of conspiracy in McKernan v

Fraser.173 There Dixon J applied the United Kingdom decision in
Sorrel v Smith. His Honour found the tort existed, in relation to lawful
acts, where two or more parties combined with the ‘sole, true,
dominating or main purpose’ of harming the plaintiff.174 It was not
enough to do something which inevitably would harm the plaintiff. A
sharp distinction was required between acts done for the benefit of the
defendant or their business that incidentally harm the plaintiff (not
conspiracy), and acts done with the dominant purpose of harming the
plaintiff.175 Evatt J agreed, adding that in relation to unlawful acts, the
tort of conspiracy arises if there was evidence of intention to injure
another.176 A similar view was taken in Williams v Hursey,177 with the
Court focussing on whether the predominant motive of the defendant
was to harm the plaintiff, or pursue legitimate business activity.
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
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
Australian law has also recognised the tort of intimidation.180 In Sid

Ross Agency v Actors and Announcers’ Equity Association of
Australia, Mason JA (with whom the rest of the Court agreed) referred
to links between the tort of intimidation and the possibly wider tort of
unlawful actions damaging commercial interests.181
In summary, Australian law has accepted the tort of inducing breach

of contract as per Lumley v Gye, but interpreted the requirements of
this tort very strictly and narrowly. The High Court has acknowledged
the possible existence of the tort of interference with trade or business,
but has not decided whether it applies in Australian law or not, nor
whether Lumley v Gye is just an example of it. It is not clear the extent
to which OBG is accepted.182 And Australian case law has not openly
countenanced a possible rationalisation of these economic torts,
together with the closely related torts of conspiracy and intimidation.
IV SUGGESTED LAW REFORM IN AUSTRALIA

The article will now suggest two reforms to Australian law. It will be
argued that Australian law should recognise a new tort of unlawful,
intentional interference with trade or business interests, and that
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
Australian law should reconceptualise the economic torts around this

new tort. The argument is the existing torts of inducing breach of
contract, the tort of conspiracy, and tort of intimidation, should be
folded into a new tort of unlawful, intentional interference with the
trade or business of another.
A Not Radical
The suggestion may sound radical; however, in fact it is not a seismic

shift from where Australian law currently stands. At the risk of
simplicity, the existing torts and their summary application are:
Existing Tort Summary of Application
Inducing breach of contract Defendant induces one party to a contract to

breach it; they must have substantial knowledge
of the contract or wilfully turn a blind eye to it;
the plaintiff must suffer loss as a result; no
intention to injure the plaintiff need be proven
Unlawful interference with Unlawful act interfering with another’s business

trade or business (as per High Court decision in Brisbane
Shipwrights, though subsequent High Court
decisions leave open whether the tort is part of
Australian law); not entirely clear whether intent
to harm another’s business or trade need be
proven
Conspiracy Two or more parties enter into a combination

Unlawful Means with at least one purpose of damaging the
Conspiracy plaintiff, and they do so; unlawfulness of actions
and intent of defendants must be proven
Conspiracy Only actionable where there is a combination

Lawful Means Conspiracy with the sole or dominant purpose of damaging
the plaintiff, and it does so; intent of defendants
must be proven
Intimidation Defendant threatens the plaintiff they will commit

unlawful acts and intends to thereby cause the
plaintiff loss; intent of defendants must be proven
335
335
There is substantial overlap, and some differences, across the

economic torts. Both the second and fourth tort, and one type of the
third tort, require the plaintiff prove the defendant is engaged in an
unlawful act. The first tort also requires this, if ‘unlawful act’ is
defined to include breach of contract. Regarding intention, the third
and fourth torts require proof the defendant intended to harm the
plaintiff. In respect of the second tort, Dixon J did not make this clear,
but subsequent cases have generally confirmed it is a requirement to
show the defendant intended to harm the plaintiff thereby. The first
tort does not specifically require proof of the defendant’s intent, but it
is not a large leap from proof the defendant was aware what they were
doing involved a breach of a contract to which the plaintiff was a party,
to a conclusion that breach of it would harm the plaintiff. Breaches of
contract will tend to harm the innocent party.
B Academic Support for the Suggested Reforms
There is substantial, high-level academic commentary supportive

of recognition of the new tort, including the possibility it could
effectively subsume the existing torts of inducing breach of contract,
conspiracy and intimidation. Employment law specialist Professor
Andrew Stewart supports recognition of such a tort and its
subsumption of the others:
As long as the innominate tort of unlawful interference is recognised in

some form, as seems now clearly to be the case, then the doing of any act
amounting to illegal means with the requisite intention will ground
liability; thus there is no need to rely on the fact of combination … it has
been apparent since Rookes v Barnard that there ought to exist a tort of
unlawful interference with economic interests. If the threat of an illegal
act to the damage of the plaintiff is a tort, then so must in all logic be its
commission. There seems to be no good reason why actionable unlawful
interference should be confined to the situations covered by the three
relevant nominate torts, that is either (a) where threats are issued but not
carried into effect (intimidation); (b) where the defendants combine to
inflict loss (conspiracy); or (c) where it is the plaintiff’s purely contractual
relationships which are affected (indirect contractual interference).183
183
Stewart (n 23) 367.
336
336
Dyson Heydon also favoured rationalisation of the economic torts,

adopting a general tort of unlawful interference with the plaintiff’s
commercial interests. He said if this reform occurred:
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
The desire for rationalisation of principle, and consistency across the

economic torts, has been noted by judges:
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’
The tort should be grounded in behaviour that is unlawful.186 The

common law should not provide a remedy for hard-nosed, lawful
commercial behaviour of a defendant to further their business
interests, although its effect is to harm or injure the plaintiff, even if it
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
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
It is conceded that others have argued that intentionally inflicted

harm should be actionable per se in the absence of evidence of
unlawfulness.193 Dyson Heydon favoured this position:
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
Respectfully, the tort should require evidence that the defendant’s

actions were unlawful; mere intent to cause a defendant loss should be
insufficient to attract liability. This is the position of the United
Kingdom Supreme Court.195 The requirement of unlawfulness is an
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
appropriate dividing line between hard-nosed business strategy and

practice designed to further the defendant’s interests but possibly
damaging to a competitor, but which the law should permit in a free
market economy,196 and behaviour which should not be countenanced
because, on balance, the courts have found the damage such behaviour
is likely to cause outweighs the benefit.197 It is conceded that this is a
value judgment about which reasonable minds will differ. However,
the distinction between lawful and unlawful actions is knowable and
workable.
D ‘Intentional’
The tort should embrace a requirement of intent. This is another

important control mechanism.198 The plaintiff would need to establish
the defendant, by their behaviour, intended to injure them. Formulated
as such, the tort would likely fully encompass the current tort of
inducing breach of contract, concerning unlawful behaviour in the
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
form of an accessory to a contract breach, together with the mental

element of intent. Foreseeability would not be sufficient.
It would fully encompass the current tort of intimidation, involving

threats of unlawful behaviour together with intent.199 It would fully
encompass the unlawful means aspect of the tort of conspiracy, based
as it is on notions of proof of unlawful behaviour, and intention to
damage the plaintiff. If subsumed into a new tort of unlawful damage
to commercial interests, the requirement of a combination would
become redundant.200 The proposed new tort would not readily
encompass that known as lawful means conspiracy, because the gist
of the proposed new tort would be unlawful behaviour. As a result,
either that aspect of conspiracy should remain as a separate tort, or else
it should no longer be regarded as a common law wrong. It should be
acknowledged that behaviour that might at common law have been
regarded as lawful means may be converted to unlawful means due to
the anti-competitive practice provisions of the Australian Competition
and Consumer Act 2010 (Cth),201 in any event. Conduct that is within
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
these prohibitions should be regarded as ‘unlawful means’ within the

proposed new tort. Obviously, that legislation may also provide
plaintiffs with a remedy in such cases. Though not essential for the
argument, there is an interesting congruence between the anti-
competitive provisions of the above legislation and the proposed tort
here, in that intention to harm another is central to the wrongfulness of
the behaviour proscribed by the legislation, and proposed in the
common law tort.202
It would fully encompass the current Lumley v Gye tort of inducing

a breach of contract. Once the definition of unlawful act is taken to
include breach of a contract, including being an accessory to its breach
by encouraging or coercing it, there is no real controversy with
subsuming it into the broader tort. Both require unlawful acts and
focus on the intent with which the defendant acted. But recognition of
the new tort will make things easier. No longer will it be necessary to
continue to stretch the Lumley v Gye tort ever broader, to try to make
it fit circumstances where the court thinks that an actionable wrong
has been committed, but the present technical parameters of the tort
have prevented it, which has effectively been the history of Lumley as
discussed above.203 The suggestion that Lumley v Gye should be seen
as part of the broader tort of unlawful interference with commercial
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
interests has been suggested by various justices and academics.204

However, obviously this was not the direction taken in OBG, though
Lord Hoffmann noted there was often overlap between the two torts
in practice.205
E Substance Not Form
An advantage of the new approach is that it breaks down some of the

technicalities of the existing case law. For example, some might argue
in cases such as Torquay Hotel that an individual who hinders or
makes it difficult to perform an existing contract, but does not induce
its breach, should be subject to legal sanction. However, due to the
parameters of the traditional Lumley v Gye action, a plaintiff so
affected could not claim. Further, cases like Temperton v Russell
provide an example where the defendant’s behaviour was targeted to
ensure a contract is never formed between the plaintiff and a third
party. Again, under the traditional technicalities of Lumley v Gye, no
action would be possible. Alternatively, the defendant’s activity might
be targeted towards deterring future contracting. Again, on a
traditional Lumley v Gye approach, no action would be possible.
Viscount Radcliffe expressed dissatisfaction with these technicalities:
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
206
J T Stratford and Son Ltd v Lindley (n 38) 330.
342
342
Some courts have attempted to adapt Lumley v Gye in a way that

breaks these shackles, though the House of Lords eventually frowned
upon such moves in OBG. These suggestions had taken the tort well
away from its historical moorings. In some ways, developments of the
law in this area have been reminiscent of piling more and more sand
onto a sandcastle which has relatively narrow foundations.
Sometimes, the better alternative is to start again, building a new
sandcastle with broader foundations.
Some have argued that an advantage of a new generalised tort of

unlawful damage to commercial interests is that some of these
technicalities would be stripped away. The law would not be so
focussed on whether there was an inducement to breach an existing
contract; rather, there would be a wider net drawn over unscrupulous
business behaviour. The idea would be to facilitate greater business
activity, by stamping out certain sharp practice.207 However, control
mechanisms in the form of requirements of unlawfulness and intent
would rein the tort in, making it manageable.
In terms of the specific changes that the reforms would make to

existing Australian precedents, the result would be to:
(a) Clear up the uncertainty expressed in cases such as Sanders v

Snell208 as to whether Australian law recognises the tort of
intentionally causing loss by unlawful means;
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
(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

Explanation of Economic Torts in UK & Australia

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Explanation of Economic Torts in UK & Australia

Uploaded by

Copyright:

Available Formats

CHANGE THE RULES: REFORM OF THE

ECONOMIC TORTS IN AUSTRALIA

a tort is accepted into Australian law, whether it should trigger

Of course, these kinds of strategic re-alignments have occurred in

It has required something more than reasonable foreseeability in

law.11 This article will suggest it is also possible to do so in the context

It is necessary to explain in some detail the development of the law

these four torts, a complication arises because it has commonly been

Finally, by way of introduction, it should be remembered that many

In Part II of this article, I explain developments in the United

This article aims to build from the impressive scholarship in this

II DEVELOPMENTS IN THE UNITED KINGDOM

A Tort of Inducing Breach of Contract

The tort that we would today recognise as that of inducing breach of

Economic Torts and Anti-Secondary Boycott Laws in Australia’ (PhD Thesis,

So in Bowen v Hall (‘Bowen’),31 the High Court expanded on the

The courts have interpreted the requirement of knowledge liberally.

This issue was resolved by the House of Lords in OBG Ltd v

Lord Hoffmann in OBG confirmed that it was necessary, to

In summary, this tort has expanded significantly in scope since its

B Tort of Interference with Trade or Business or of Causing Loss

In a different line of cases, early decisions had suggested unlawful

A further example is Tarleton v M’Gawley (‘Tarleton’),52 involving

Courts suggested overlap between the nascent tort and that of

alternatively, that Lumley v Gye was a subset of a broader principle.

This suggestion of a broader principle also occurred in Mogul

Matters came to a head in Allen v Flood (‘Allen’).58 The case

intimidation and breach of contract. A majority of the Court rejected

The majority rejected suggestions made in Mogul Steamship in the

Lord Watson said there were two circumstances where a defendant

Despite Allen v Flood, judges continued to suggest that Lumley v

The impact of Lumley was subsequently broadened in another way,

such a case the defendant that prevented performance had induced

I have always understood that if one person deliberately interferes with

Lord Denning’s judgment followed obiter by members of the

The opportunity arose for the House of Lords to re-consider the

Allan,76 different views were expressed as to the requirements for the

Lord Hoffmann, with whom others agreed, confirmed two elements

Lord Nicholls agreed with requirement (b) regarding proof of

C Reflections on the United Kingdom Developments Regarding

Wisdom is more attainable with the benefit of hindsight. The courts

have been applied in a Lumley v Gye situation, though it was not

Again, the House of Lords had an opportunity to rationalise these

below) it did not require the defendant’s behaviour involve a third

Respectfully, the formulation of Lord Nicholls, requiring an

The second reason was the Court’s statement that ‘unlawfulness’

Gye action.103 However, it is not a large step, when knowledge of the

Lord Hoffmann also criticised the distinction between direct and

separate.108 Similarly, in the year after OBG in Revenue and Customs

D Conspiracy and Intimidation

Classically the courts have considered an unlawful conspiracy to be

industrial relations issues. A contract existed between the plaintiff and

This case was decided based on the tort of conspiracy. Members of

There can be a fine line between an unlawful actionable conspiracy,

Similarly in Sorrell v Smith,117 an association of retail newsagent

Eventually, the United Kingdom courts would distinguish in this

the combination had at least one purpose of damaging the plaintiff.

Carty contrasts the broad modern application of the tort of

In Rookes v Barnard123 the House of Lords recognised the tort of

In sum, the United Kingdom law in relation to the economic torts

III DEVELOPMENTS IN AUSTRALIAN LAW

A High Court Decisions

The High Court considered itself bound by decisions of the House of