Who issues a claim- Court or claimant?

[ThedaBara]

I'm thinking that if I can steer this towards mediation, that would be preferable to going to trial... TB

[Vauban]

I'm thinking that if I can steer this towards mediation, that would be preferable to going to trial... TB

 

As you still haven't posted up either your original Particulars of Claim or their Defence in response it is hard to say. But if their Defencelargely consists of an absolute and categorical denial of the incident, then mediation is unlikely to be appropriate.

 

I'm afraid I still worry that your case is weak in law, even if the facts as you describe them are largely accepted by the Court. But I am not a lawyer, so I have no qualification to opine with authority!

 

Can you post up the documents requested, which might help to get a better informed view?

[Guest]

.. wondering about the wording and whether it makes much difference in this case.

 

TB

as has been posted, without the fuller details...prob difficult for anyone to suggest for sure.

best bet seems then instructing a lawyer, at least for an initial opinion

[ThedaBara]

I don't think it's really necessary to post up the full details of my POC because it's a straightforward claim for compensation due to the Def's interference with my right to sell my home, citing threats to the purchasers and malicious falsehoods as to the condition of my septic tank. He has denied everything, but I have documentary proof that he is lying.

There's lots on the subject of Tort of Interference here;

 

Judgments - OBG Limited and others (Appellants) v. Allan and others (Respondents)Douglas and another and others (Appellants) v. Hello! Limited and others (Respondents)Mainstream Properties Limited (Appellants) v. Young and others and another (Respondents)

 

On the narrower interpretation this tort has a much more limited role. On this interpretation the function of the tort of unlawful interference is a modest one. Its function is to provide a claimant with a remedy where intentional harm is inflicted indirectly as distinct from directly. If a defendant intentionally harms a claimant directly by committing an actionable wrong against him, the usual remedies are available to the claimant. The unlawful interference tort affords a claimant a like remedy if the defendant intentionally damages him by committing an actionable wrong against a third party. The defendant's civil liability is expanded thus far, but no further, in respect of damage intentionally caused by his conduct.

 

155. In my view the former is the true rationale of this tort. The second interpretation represents a radical departure from the purpose for which this tort has been developed. If adopted, this interpretation would bring about an unjustified and unfortunate curtailment of the scope of this tort.

156. On either interpretation complications may arise in the application of this tort in certain types of cases, notably where the civil rights of a third party infringed by the defendant are statute-based. The existence of these perceived complications is not a pointer in favour of either interpretation.

157. Take the case of a patent. A manufacturer seeks to steal a march on his rival by employing a novel, patented process. In order to sell his product more cheaply, he does so without paying any licence fee to the owner of the patent. By means of this patent infringement he undercuts his law-abiding rival. He has damaged his rival's business by an unlawful means. But this conduct, however reprehensible, cannot afford the rival manufacturer a cause of action for damages for interference with trade by unlawful means. Parliament has specified the nature and extent of the remedies available for infringement of patents. Remedial relief for infringement of a patent is available to patentees and exclusive licensees. It would be inconsistent with the statutory scheme if the common law tort were to afford a remedy more widely.

158. Thus in Oren v Red Box Toy Factory Ltd [1999] FSR 785, 800, para 42, Jacob J said in the context of a claim for unlawful interference with contractual relations:

 

▪ 'the right to sue under intellectual property rights created and governed by statute [is] inherently governed by the statute concerned. Parliament in various intellectual property statutes has, in some cases, created a right to sue, and in others not. In the case of the [Copyright, Designs and Patents Act 1988] it expressly re-conferred the right on a copyright exclusive licensee, conferred the right on an exclusive licensee under the new form of property called an unregistered design right .. but did not create an independent right to sue on a registered design exclusive licensee. It is not for the courts to invent that which Parliament did not create'.

159. The difficulties here are more apparent than real. The answer lies in keeping firmly in mind that, in these three-party situations, the function of the tort is to provide a remedy where the claimant is harmed through the instrumentality of a third party. That would not be so in the patent example.

160. Similarly with the oft quoted instance of a courier service gaining an unfair and illicit advantage over its rival by offering a speedier service because its motorcyclists frequently exceed speed limits and ignore traffic lights. The unlawful interference tort would not apply in such a case. The couriers' criminal conduct is not an offence committed against the rival company in any realistic sense of that expression.

161. Nor am I persuaded that the effect of the broader interpretation of 'unlawful means' is to impose civil liability on a defendant simply because he reached his victim through an agent rather than directly. I am far from satisfied that, in a two-party situation, the courts would decline to give relief to a claimant whose economic interests had been deliberately injured by a crime committed against him by the defendant.

162. For these reasons I accept the approach of Lord Reid and Lord Devlin and prefer the wider interpretation of 'unlawful means'. In this context the expression 'unlawful means' embraces all acts a defendant is not permitted to do, whether by the civil law or the criminal law.

163. I add a brief observation on the decision of the House in Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173. There the House held that Shell and BP's alleged criminal breaches of the sanctions orders against Southern Rhodesia did not afford a civil remedy to Lonrho. That decision does not assist either way on the point now under consideration. The House was not considering the scope of the unlawful interference tort. In that case there was no allegation that Shell and BP's alleged acts in contravention of the sanctions orders were done to injure Lonrho. The case proceeded on the footing that this essential ingredient of the unlawful interference tort was not present.

Intent to injure

164. I turn next, and more shortly, to the other key ingredient of this tort: the defendant's intention to harm the claimant. A defendant may intend to harm the claimant's business either as an end in itself or as a means to an end. A defendant may intend to harm the claimant as an end in itself where, for instance, he has a grudge against the claimant. More usually a defendant intentionally inflicts harm on a claimant's business as a means to an end. He inflicts damage as the means whereby to protect or promote his own economic interests.

165. Intentional harm inflicted against a claimant in either of these circumstances satisfies the mental ingredient of this tort. This is so even if the defendant does not wish to harm the claimant, in the sense that he would prefer that the claimant were not standing in his way.

166. Lesser states of mind do not suffice. A high degree of blameworthiness is called for, because intention serves as the factor which justifies imposing liability on the defendant for loss caused by a wrong otherwise not actionable by the claimant against the defendant. The defendant's conduct in relation to the loss must be deliberate. In particular, a defendant's foresight that his unlawful conduct may or will probably damage the claimant cannot be equated with intention for this purpose. The defendant must intend to injure the claimant. This intent must be a cause of the defendant's conduct, in the words of Cooke J in Van Camp Chocolates Ltd v Aulsebrooks Ltd [1984] 1 NZLR 354, 360. The majority of the Court of Appeal fell into error on this point in the interlocutory case of Miller v Bassey [1994] EMLR 44. Miss Bassey did not breach her recording contract with the intention of thereby injuring any of the plaintiffs.

167. I add one explanatory gloss to the above. Take a case where a defendant seeks to advance his own business by pursuing a course of conduct which he knows will, in the very nature of things, necessarily be injurious to the claimant. In other words, a case where loss to the claimant is the obverse side of the coin from gain to the defendant. The defendant's gain and the claimant's loss are, to the defendant's knowledge, inseparably linked. The defendant cannot obtain the one without bringing about the other. If the defendant goes ahead in such a case in order to obtain the gain he seeks, his state of mind will satisfy the mental ingredient of the unlawful interference tort. This accords with the approach adopted by Lord Sumner in Sorrell v Smith [1925] AC 700, 742:

 

▪ 'When the whole object of the defendants' action is to capture the plaintiff's business, their gain must be his loss. How stands the matter then? The difference disappears. The defendant's success is the plaintiff's extinction, and they cannot seek the one without ensuing the other.'

The tort of inducing a breach of contract

168. The other tort requiring consideration is the tort of inducing a breach of contract. This tort is known by various names, reflecting differing views about its scope. At its inception in 1853 this tort was concerned with a simple tripartite situation of a non-party to a contract inducing a contracting party to break her contract. Did the other party to the contract have a cause of action against the non-party?

169. The facts in Lumley v Gye 2 E & B 216 are familiar to every law student. The well-known opera singer Johanna Wagner had contracted with Mr Lumley to perform exclusively at the Queen's Theatre. Mr Gye, the owner of Her Majesty's Theatre, 'enticed and procured' Miss Wagner to break her contract. The action came before the court on a plea of demurrer. The question was whether the counts disclosed a cause of action against Mr Gye. The court, by a majority, held they did.

170. The reasoning of the judges differed in its generality. It was established law that a person who knowingly procured a servant to leave his master's service committed an actionable wrong. Crompton J saw no reason to confine this principle to contracts for services of any particular description. Erle J reasoned more widely. He said, at page 232, that the principle underlying the master and servant cases is that procurement of the violation of a right is a cause of action:

 

▪ 'It is clear that the procurement of the violation of a right is a cause of action in all instances where the violation is an actionable wrong, as in violations of a right to property, whether real or personal, or to personal security: he who procures the wrong is a joint wrongdoer, and may be sued, either alone or jointly with the agent, in the appropriate action for the wrong complained of.' (emphasis added)

This principle, of liability for procurement of a wrong, applies to a breach of contract as well as an actionable wrong: page 233. Wightman J expressed himself similarly, at page 238:

 

▪ 'It was undoubtedly prima facie an unlawful act on the part of Miss Wagner to break her contract, and therefore a tortious act of the defendant [knowingly] to procure her to do so.' (emphasis added)

171. This 'procurement' analysis commended itself to Lord Watson in Allen v Flood [1898] AC 1. Lord Watson approved Erle J's reasoning as quoted above, and continued, at pages 106-107:

 

▪ 'These statements embody an intelligible and a salutary principle, and they contain a full explanation of the law upon which the case [Lumley v Gye] was decided. He who wilfully induces another to do an unlawful act which, but for his persuasion, would or might never have been committed, is rightly held responsible for the wrong which he procured.'

172. Thus understood, the rationale and the ingredients of the 'inducement' tort differ from those of the 'unlawful interference' tort. With the inducement tort the defendant is responsible for the third party's breach of contract which he procured. In that circumstance this tort provides a claimant with an additional cause of action. The third party who breached his contract is liable for breach of contract. The person who persuaded him to break his contract is also liable, in his case in tort. Hence this tort is an example of civil liability which is secondary in the sense that it is secondary, or supplemental, to that of the third party who committed a breach of his contract. It is a form of accessory liability.

173. This form of liability is to be contrasted with the tort of unlawful interference. This is a 'stand-alone' tort of wide scope, imposing primary liability on a defendant for his own conduct, irrespective of whether on the facts anyone else may also be liable, either in contract or in tort. On this I agree with Philip Sales and Daniel Stilitz in their stimulating article 'Intentional Infliction of Harm by Unlawful Means', (1999) 115 LQR 411, 433.

Preventing performance of a contract: 'interfering with contractual relations'

174. I must move now to more troubled waters. In Quinn v Leathem [1901] AC 495 the House upheld the decision in Lumley v Gye. In doing so their Lordships expressed the principle underlying that decision in broad terms. Lord Macnaghten, at page 510, said that Lumley v Gye was rightly decided, not on the ground of malicious intention, but:

 

▪ '… on the ground that a violation of legal right committed knowingly is a cause of action, and that it is a violation of legal right to interfere with contractual relations recognised by law if there be no sufficient justification for the interference.' (emphasis added)

Lord Lindley said the 'principle which underlies the decision [in Lumley v Gye] reaches all wrongful acts done intentionally to damage a particular individual and actually damaging him': page 535.

175. These broad, indeed, sweeping affirmations made no mention of the need for inducement of breach of contract in Lumley v Gye cases. Lord Macnaghten spoke quite generally of 'interfering with contractual relations' as a violation of legal right. Lord Lindley expressed the underlying rationale in even wider terms. On the face of these observations the Lumley v Gye tort is not confined to cases where the defendant induced a contracting party to break his contract. These observations could be taken to suggest that the Lumley v Gye tort covers also cases where the defendant with intent to damage the claimant prevented a party to a contract from performing his contractual obligations.

176. In GWK Ltd v Dunlop Rubber Co Ltd (1926) 42 TLR 376 Lord Hewart CJ applied these statements in a 'prevention' case. GWK, a car manufacturer, agreed with a tyre manufacturer Associated Rubber Manufacturers ('ARM'), that the latter's tyres would be fitted on all GWK cars exhibited for sale. Two of GWK's cars were exhibited at the Glasgow motor show. On the eve of the show Dunlop wrongfully removed ARM's tyres from the cars and replaced them with its own Dunlop tyres.

177. Clearly, Dunlop did not induce GWK to break its contract with ARM. Equally plainly, Dunlop was liable to ARM for unlawful interference with its business. Dunlop intended to damage ARM by unlawful means, namely, by trespass to the goods of GWK. But Lord Hewart followed a different route. He gave effect to the broad observations of Lord Macnaghten and Lord Lindley. Dunlop had knowingly committed a violation of ARM's legal rights by interfering without justification with the contractual relations existing between ARM and GWK and had done so with intent to damage ARM.

178. With hindsight it is evident that application of the Lumley v Gye tort to a 'prevention' case was unfortunate. There is a crucial difference between cases where the defendant induces a contracting party not to perform his contractual obligations and cases where the defendant prevents a contracting party from carrying out his contractual obligations. In inducement cases the very act of joining with the contracting party and inducing him to break his contract is sufficient to found liability as an accessory. In prevention cases the defendant does not join with the contracting party in a wrong (breach of contract) committed by the latter. There is no question of accessory liability. In prevention cases the defendant acts independently of the contracting party. The defendant's liability is a 'stand-alone' liability. Consistently with this, tortious liability does not arise in prevention cases unless, as was the position in GWK, the preventative means used were independently unlawful.

179. Jenkins LJ made this point in D C Thomson & Co Ltd v Deakin [1952] Ch 646, 693:

 

▪ '… acts of a third party lawful in themselves do not constitute an actionable interference with contractual rights merely because they bring about a breach of contract, even if they were done with the object and intention of bringing about such breach'. (emphasis added)

Evershed MR was of the same view. Suppose, he said, a defendant buys up all the commodities of a particular character with the object of preventing performance of a contract whereby the claimant would receive a supply of those commodities. The defendant would not act tortiously in such a case: page 680.

180. Given this difference between prevention and inducement, it is confusing and misleading to treat prevention cases as part and parcel of the same tort as inducement cases. The rationale is not the same, nor are the ingredients. But the rationale and ingredients of liability in prevention cases are the same as those of the tort of interference with a business by unlawful means. Prevention cases should be recognised for what they are: straightforward examples of the latter tort, rather than as exemplifying a wider version of Lumley v Gye labelled 'interference with contractual relations'.

A step too far

181. A regrettable consequence of treating 'preventing performance' as an extension of the Lumley v Gye tort has been to widen the ambit of this tort in an unprincipled fashion. It has meant that a defendant who intentionally harmed a plaintiff may be liable even though he did not use unlawful means nor did he induce a party to break his contract. A defendant may be held liable for intentional harm even though he did not cross the Rubicon by doing something he had no legal right to do. He is liable for intentional harm effected by lawful means.

182. This step was taken by the Court of Appeal in the well known case of Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106. A trade union and its officials blacked supplies of oil to the Imperial Hotel in Torquay. This prevented the oil company Esso from performing its contractual obligation to supply oil to the hotel. The Court of Appeal held this was actionable at the suit of the hotel.

183. In reaching this conclusion Lord Denning MR said Lord Macnaghten, in the passage quoted above from Quinn v Leathem [1901] AC 495, 510, extended the principle of Lumley v Gye. The time has come, Lord Denning stated, to extend the principle further, to cover deliberate and direct interference with the performance of a contract without causing any breach. The interference must be 'direct'. Unlawful means was an ingredient of liability if, but only if, the interference was 'indirect', as in Evershed MR's example of cornering the market in a commodity. In the instant case the interference was direct. So liability arose irrespective of whether the means used by the defendants to prevent performance of Esso's supply contract was lawful or not.

184. The court went further in another respect. The court held that the tort applied even though the interference did not give rise to a breach of contract. Esso's supply contract included a force majeure clause. This mattered not. What mattered was that Esso was prevented or hindered from performing its contractual obligations. This view of the law was approved by your Lordships' House in Merkur Island Shipping Corpn v Laughton [1983] AC 570, 608, per Lord Diplock.

185. With the very greatest respect I have difficulty with Lord Denning's extension of Lumley v Gye. The effect of this extension is that a person who directly prevents performance of a contract by wholly lawful means, and thereby intentionally inflicts damage on the claimant, is liable to the claimant. No reason was given, and none is discernible, for this fundamental extension of the law. Why should a defendant, acting wholly lawfully, be liable in such a case, although the use of unlawful means is a prerequisite of liability if he intentionally inflicts damage in any other way?

186. Nor is the basis of the distinction between direct and indirect interference apparent. One would suppose the outcome on liability would be the same whether a person sought to achieve his end by direct or indirect means. It would be remarkable if this were not so.

187. This extension of the Lumley v Gye tort must be going too far. To hold a defendant liable where the intentional harm is inflicted by lawful means runs counter to the limit on liability long established in English law. So long as this general limit is maintained in respect of other forms of interference with a claimant's business, and Lord Denning did not suggest this should be changed, the extension in liability proposed by him and seemingly approved by Lord Diplock is irrational. Despite the high authority of these cases, I have to say that on this occasion these distinguished judges fell into error. They were led astray by the width of Lord Macnaghten's observations made in 1901, long before the unlawful interference tort became shaped. The jurisprudence of the economic torts had not then been thought through.

188. For these reasons this extension of the inducement tort of Lumley v Gye cannot stand consistently with the economic torts having a coherent framework. This extension is productive of obscurity and, hence, uncertainty. This, in turn, as Lord Diplock himself once said, is destructive of the rule of law: see Merkur Island Shipping Corpn v Laughton [1983] AC 570, 612.

189. I feel bound to say therefore that the ambit of the Lumley v Gye tort should properly be confined to inducing a breach of contract. The unlawful interference tort requires intentional harm effected by unlawful means, and there is no in-between hybrid tort of 'interfering with contractual relations'. In so far as authorities suggest or decide otherwise they should not now be followed. I leave open the question of how far the Lumley v Gye principle applies equally to inducing a breach of other actionable obligations such as statutory duties or equitable or fiduciary obligations.

190. On this footing the 'force majeure' point seems largely to disappear. It can hardly arise in inducement cases. An exemption clause can scarcely apply to a contracting party who chooses to default. Nor would the existence of an exemption clause have any obvious relevance in unlawful interference cases. If a defendant prevents performance of a contract by unlawful means, the existence of an exemption clause will be neither here nor there. The question will always be: how much loss did this interference cause to the claimant?

Inducing a breach of contract: the mental element

191. I turn next to the mental ingredient of the Lumley v Gye tort. The mental ingredient is an intention by the defendant to procure or persuade ('induce') the third party to break his contract with the claimant. The defendant is made responsible for the third party's breach because of his intentional causative participation in that breach. Causative participation is not enough. A stranger to a contract may know nothing of the contract. Quite unknowingly and unintentionally he may procure a breach of the contract by offering an inconsistent deal to a contracting party which persuades the latter to default on his contractual obligations. The stranger is not liable in such a case. Nor is he liable if he acts carelessly. He owes no duty of care to the victim of the breach of contract. Negligent interference is not actionable.

192. The additional, necessary factor is the defendant's intent. He is liable if he intended to persuade the contracting party to breach the contract. Intentional interference presupposes knowledge of the contract. With that knowledge the defendant proceeded to induce the other contracting party to act in a way the defendant knew was a breach of that party's obligations under the contract. If the defendant deliberately turned a blind-eye and proceeded regardless he may be treated as having intended the consequence he brought about. A desire to injure the claimant is not an essential ingredient of this tort.

193. For completeness I mention, but without elaboration, that a defence of justification may be available to a defendant in inducement tort cases. A defendant may, for instance, interfere with another's contract in order to protect an equal or superior right of his own, as in Edwin Hill and Partners, First National Finance Corpn Plc [1989] 1 WLR 225.

A bird's-eye view

194. It may be helpful to pause and take an overall look at where this leaves the law. The effect of the views expressed above is to draw a sharp distinction between two economic torts. One tort imposes primary liability for intentional and unlawful interference with economic interests. The other tort imposes accessory liability for inducing a third party to commit an actionable wrong, notably a breach of contract, but possibly some other actionable civil wrongs as well.

195. This overall framework, it is to be hoped, should assist in the more coherent development of the economic torts. On this I am comforted by noting that this twofold structure substantially accords with the views of at least some commentators, including Hazel Carty 'An Analysis of the Economic Torts'(2001), pages 271-276, and Ken Oliphant, 62 MLR 320, 322.

Mainstream v Young

196. Against that legal background I turn at last to the three appeals, starting with Mainstream Properties Ltd v Young.

197. Mainstream was a residential property development company concentrating on the Derbyshire area. The defendant Mr Young was a director of the company and the defendant Mr Broad a manager. They were the company's two most senior employees. In late 2000 and early 2001 Mr Young and Mr Broad appropriated to themselves the opportunity to develop a site at Findern. This was in breach of the contractual and fiduciary duties they owed to Mainstream. They developed the site as a joint venture with the defendant Mr De Winter. Mr De Winter provided the necessary finance. Without his assistance the other two could not have proceeded with the development.

 

TB

[ThedaBara]

Well... I have just found out that there is a form called N10. This is news to me... TB

[Ganymede]

What form is that?

[Old Cogger]

Notice of Acknowledgment N10?

[ThedaBara]

Uhuh... the one the court didn't send to me when the def apparently acknowledged the claim. TB

[ThedaBara]

It's obvious what's happened;

The defendant has filed his defence along with a backdated AOC in the same envelope...

Why else would the Court be discussing a default judgement with me right up until September, if the defendant had acknowledged as early as the first week in August?

I wonder if the court logs receipt of documents?

TB

[ThedaBara]

Those who make the rules, break the rules... TB

[Ganymede]

Why are you still getting distracted by this?

 

I thought we'd already established the timeline of AoS and Defence etc?

 

Anyway, the Court have accepted it so time to get over it and move on with your claim.

[ThedaBara]

Why are you still getting distracted by this?

 

I thought we'd already established the timeline of AoS and Defence etc?

 

Anyway, the Court have accepted it so time to get over it and move on with your claim.

 

So you don't think the court remiss for not sending the N10, to let me know about the AOS? Wasting my time and money (and the courts) with requests for default judgement when I needn't have bothered?

I still don't have the N10, and it's now 8 weeks after my claim was served.

 

I'm just angry that we are expected to comply with CPR to the letter but the courts don't seem to bother with the rules at all.

TB

[Ganymede]

It wasn't ideal from the Court but what does it matter now?

 

You're letting yourself get distracted from your claim by focusing on irrelevancies! You don't need the N10 and it adds nothing.