“By reason of [KKK’s] wrongful conduct as set out above, [JKL] has suffered loss and damage.”
“A commits the delict or tort of inducing a breach of contract where B and C are contracting parties and A, knowing of the terms of their contract and without lawful justification induces B to break that contract.”
“20. ……liability under Lumley v Gye 2 E & B 216 requires only the degree of participation in the breach of contract which satisfies the general requirements of accessory liability for the wrongful act of another person: for the relevant principles see CBS Songs Ltd v Amstrad Consumer Electronics plc[1988] AC 1013 and Unilever plc v Chefaro Proprietaries Ltd[1994] FSR 135 .”
“36. This treats the distinction as turning simply upon whether there was communication, directly or through an agent, between the defendant and the contract-breaker. But, like Lord Denning in the Daily Mirror case, I cannot see why this should make a difference. If that is what the distinction between “direct” and “indirect” means, it conceals the real question which has to be asked in relation to Lumley v Gye 2 E & B 216: did the defendant’s acts of encouragement, threat, persuasion and so forth have a sufficient causal connection with the breach by the contracting party to attract accessory liability? The court in Lumley v Gye made it clear that the principle upon which a person is liable for the act of another in breaking his contract is the same as that on which he is liable for the act of another in committing a tort. It follows, as I have said, that the relevant principles are to be found in cases such as CBS Songs Ltd v Amstrad Consumer Electronics plc[1988] AC 1013 and Unilever plc v Chefaro Proprietaries Ltd[1994] FSR 135 .”
“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.” 31. 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 32. “interference with contractual relations”.”
“However, to prevent performance of a contractual obligation is not the same thing as inducing its breach. The former may give rise to the tort of causing loss by unlawful means. The latter requires the defendant’s conduct to have operated on the will of the contracting party: see Lord Nicholls’ speech in the OBG case[2008] 1 AC 1 paras 174-180.”
“42. The next question is what counts as an intention to procure a breach of contract. It is necessary for this purpose to distinguish between ends, means and consequences. If someone knowingly causes a breach of contract, it does not normally matter that it is the means by which he intends to achieve some further end or even that he would rather have been able to achieve that end without causing a breach. Mr Gye would very likely have preferred to be able to obtain Miss Wagner’s services without her having to break her contract. But that did not matter. Again, people seldom knowingly cause loss by unlawful means out of simple disinterested malice. It is usually to achieve the further end of securing an economic advantage to themselves. As I said earlier, the Dunlop employees who took off the tyres in GWK Ltd v Dunlop Rubber Co Ltd 42 TLR 376 intended to advance the interests of the Dunlop company. 43. On the other hand, if the breach of contract is neither an end in itself nor a means to an end, but merely a foreseeable consequence, then in my opinion it cannot for this purpose be said to have been intended. That, I think, is what judges and writers mean when they say that the claimant must have been “targeted” or “aimed at”
“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.”
“[13] Fourthly, A must induce B to break his contract with C by persuading, encouraging or assisting him to do so. In Delictual Liability (3rd ed) at p 39, Professor Joe Thomson states that the inducement must be directed at B, the person in the contractual relationship with the victim, C, and refers to Middlebrook Mushrooms Ltd v Transport and General Workers’ Union. In that case a trade union carried on a campaign against an employer by distributing leaflets to shoppers outside supermarkets to which the employer supplied its mushrooms, urging the shoppers to boycott the employer’s produce. The Court of Appeal held that the trade union had not committed the tort of inducing a breach of contract as the defendant’s members directed their persuasion to the purchasing public and not the (allegedly) contract breaking supermarket. See also Calor Gas Ltd v Express Fuels (Scotland) Ltd, Lord Malcolm at 2008 SLT, p 135, para 47. It is clear from BMTA v Salvadori and BMTA v Gray that the tort or delict is not confined to circumstances where A has to persuade B to break his contract but can also be committed where A has dealings with B which A knows are inconsistent with the contract between B and C. In either event A induces or assists B to do something (or to refrain from doing something) which involves B breaking his contract with C.”
“Again, so far from persuading or inducing or procuring one of the parties to the contract to break it, the third party may commit an actionable interference with the contract, against the will of both, and without the knowledge of either, if, with knowledge of the contract, he does an act which, if done by one of the parties to it, would have been a breach. Of this type of interference the case of G.W.K v Dunlop Rubber Co Ltd 42 TLR 376 affords a striking example.”
“But the contract breaker may himself be a willing party and there seems to be no doubt that if a third party, with knowledge of a contract between the contract breaker and another, has dealings with the contract breaker which the third party knows to be inconsistent with the contract, he has committed an actionable interference……”
“361. If the fine dividing line in this case between prevention and inducement turns upon the ability to categorise Michael’s actions as a diversion of funds away from HHL then, on the particular facts of this case and even in the absence of any unperformed contractual obligation to fund HHL, he was guilty of that. Although those funds did not reach HHL’s bank account, they could and should have done so. Whereas a simple finding that Michael could have made the funds available to HHL, but simply chose not to, might arguably leave PB on the wrong side of that fine line, my further conclusion that he should in the circumstances have done so sustains their claim under para 10.2 of the RAPOC.”
Showing the 50 most senior of 115.