Economic Torts

The action for loss of services The employee was injured as result of the actions of defendant, so as to be unable to perform his duties, thus the company itself has suffered injury by the loss of their service.

an action which could be taken by an employer against someone who harmed their employee and caused the employer economic harm - Commissioner for Railways (NSW) v Scott (1959) 102 CLR 392 Availability in NSW = Chaina v The Presbyterian Church (NSW) Property Trust and 15 Ors [2007] NSWSC 353 (19 April 2007) Howie J in the NSW Supreme Court held that the action was still available at common law Available in VIC = Martino Developments v Doughty [2008] VSC 517 plus doesnt preclude motor accidents NSW has been restricted by legislation Motor Accidents Compensation Act 1999 (NSW) s 142 = no action may in circumstances of motor accidents Employees Liability Act 1991 (NSW) s 4 = no action in circumstances of an employee injuring another employee Chaina = Howie J held CLA s 11 available to general loss of services cases but held sizes of damages awards in s 12 of CLA did not apply as those restrictions based on earnings not lost profits by a company. Action is unavailable when: Employee, although uninjured, is unable to provide services of employment because they need to take care of child or other dependant who has been injured by anothers negligence Paul Chapman Building Pty Ltd v Boyd (1992) 27 NSWLR 255. Relationship between company and employee Private Sector If employed by private sector, it does not have to be shown that there is a contract of service between the company and the injured employee, but only the loss of services provided to it A-G (NSW) v Perpetual Trustee Co Ltd (1952) 85 CLR 237

Employee does not have to domestic servant Commr for Railways (NSW) v Scott (1959) 102 CLR 392 Companys loss of governing director Marinovski v Zutti Pty Ltd [1984] 2 NSWLR 571

Relationship between company and employee Public Sector Groves v Cwlth (1982) 150 CLR 113 not available for armed forces or police officers Not available for Armed Forces High Court held that Fed Gov is not entitled to sue for loss of services of member of the armed forces Commonwealth v Quince (1944) 68 CLR 227. Not available for Police Officers Crown could not have action for loss of NSW police officer A-G (NSW) v Perpetual Trustee Co Ltd (1952) 85 CLR 237 Available for loss of Public Service employees Dixon J A-G (NSW) v Perpetual Trustee Co Ltd (1952) 85 CLR 237 Marinovski v Zutti Pty Ltd [1984] 2 NSWLR 571 damages based on salary paid to the employee while he was unavailable to provide services to company and the companys loss of profits. Inducing breach of contract Accessorial Liability Elements - defendant intentionally induces a third party to breach of contract between third party and the plaintiff Williams v Hursey (1959) 103 CLR 30 State of mind of the defendant Defendants intention to bring about breach of contract Short v The City Bank of Sydney Ltd (1912) 15 CLR 148 Requisite intention see Allstate Life Insurance Co v ANZ Banking Group Ltd (1995) 58 FCR 26 at 42-5 1. Knowledge of the Contract Wilful blindness to existence of contract sufficient = intentionally not finding out theres a contract is sufficient OBG Ltd v Allan, [69].

Defendant must know they are breaching contract OBG Ltd v Allan [39]. Breaching contract declared void by statute, vitiated by mistake, or contrary to public policy not actionable Proform Sports Management Ltd v Proactive Sports Management [2007] 1 All ER 542 (minors contract), Hospitality Group Pty Ltd v Australian Rugby Union (2001) 110 FCR 157, in which court determined contract in statutory or common law restraint of trade before considering whether tort committed. 2. Intention to cause breach of contract Defendant did not honestly believe he or she their conduct would induce breach of contract due to what his company told him is not sufficient - Mainstream Properties Ltd v Young 3. Inducing Breach of contract Negligent conduct not sufficient for tort OBG Ltd v Allan [41] Inducing breach of contract is accessory tort - There must be an actual breach of contract committed by someone for the tort to succeed OBG Ltd v Allan Breach of contract must cause damage or damage must be inferred from the circumstances Greig v Insole [1978] 3 All ER 449 at 490 Sufficient when company set up to take on obligations preventing another company carrying out its contract with the plaintiff continuing breach of contract is sufficient as initial breach - Sai Teys McMahon Real Estate Pty Ltd v. Queen Street Apartments Pty Ltd & Anor [2007] QSC 264 Union officials pressuring company to use only union-approved employees breaches contract with non-union employees sufficient A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2007] FCA 1047 Union esting picket line on employer premises is sufficient persuasion to break contracts of employment David Jones Ltd v Federated Storemen & Packers Union (1985) 14 IR 75 at 79-80 One business to merely to solicit custom from clients of a competitor is unlikely to have sufficient causative effect to constitute this tort: Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275.

Breaching previous promise with company not to compete by luring former employees sufficient - Orica Investments Pty Ltd and 2 Ors v William McCartney and 3 Ors [2007] NSWSC 645 Employee of plaintiff company allowed Def business to run up credit, which then went into liquidation and couldnt repay the debt, court found employee didnt act in her implied duty to the company Goodchild Fuel Distributors Pty Ltd v Holman (1992) 59 SASR 454. But if contract is determinable by either party at pleasure, it is not accountable if the defendant induces a party to determine that contract, for there has been no breach but merely a lawful determination of the contract Sid Ross Agency Ltd v Acotrs & Announcers Equity Association of Australia [1971] 1 NSWLR 760 at 765. Strike may be a breach of contract if there is a no-strike clause in contract but see right to strike in Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637 Defences Justification Zhu v Treasurer of NSW (2004) 218 CLR 530, [2004] HCA 56 Not sufficient for DEF to show it has a contractual right which might have priority over that of the plaintiff. DEF must show they have existing superior legal right, which might a right in real or personal property, or right or duty conferred by statute. Defence failed as defendant had no relevant proprietary rights or any statutory right or duty. Defence of property - Edwin Hill & Partners v First National Finance Corp plc [1988] 3 All ER 801 (CA). DEF acting in public interest not enough: Greig v Insole [1978] 3 All ER 449 at 492

Causing Loss by Unlawful Means, Intimidation Primary Liability Damages may seek injunction

Damages must be not adequate remedy while interlocutory injunction must be weighed against possible harm to either DEF or plaintiff.

The elements of the tort as defined by Lord Hoffmann in OBG Ltd v Allan at [47] are (1) wrongful (unlawful) interference with the actions of a third party by the defendant; (2) the claimant has some economic interest in the third partys behaviour; (3) the defendant had an intention to cause loss to the claimant. -But what sort of unlawful means will count? This is the question on which the House of Lords in OBG v Allan divided. The majority, led by Lord Hoffmann, supported two propositions: (1) that for unlawful means to be found, the means used must be civilly actionable at the suit of the third party- or would be, if the third party had suffered some loss- [49]; (criminal unlawfulness will not do- but see Lord Nicholls in dissent, noted below) (2) but not all such means will do- the focus should be on means which interfere with the freedom of the third party to deal with the plaintiff[51]. -on the issue of intention, a similar analysis about ends, means and foreseeability is offered in [62]- it will be sufficient if the causing of loss was an inevitable part of making a profit, but not if the loss was simply a foreseeable result. Lord Hoffmann in OBG specifically excludes two party cases from his description of the elements of the tort- see [61]. OBG Ltd v Allan breach of confidence in OK! Case did not interfere with contract no causing loss by unlawful means. High Court has not considered tort yet. Defences - Justification one Australian decision, Latham v Singleton [1981] 2 NSWLR 843, which suggests that it might be a defence (at least in an industrial relations case) that the defendant can show they were motivated by a desire to protect the interests of fellow workers rather than by mere ill-will. But I would think that since we have the detailed analysis of justification in the

case of Zhu for causing contractual breach, it would probably be unwise to rely on this case too heavily- it may be that if the HC had to consider the issue again, it would similarly find a need for a sort of quasi-proprietary justification. Intimidation 1) That the DEF has made a demand, coupled with a threat, to either the plaintiff or a third party 2) That the threat is to commit an unlawful act 3) That the person threatened complied with the demand, thereby causing loss to the plaintiff. Intimidation can be used to stop anyone from entering any future contracts with the plaintiff - Sid Ross Agency Ltd v Actors & Announcers Equity Association of Australia [1971] 1 NSWLR 760 (CA). Can be criminal conduct, tort or breach of contract - Rookes v Barnard [19 Employees not working when another appears to intimate they desire his dismissal, which will be a continuing act Latham v Singleton [1981] NSWLR 279 Defences Latham v Singleton [1981] 2 NSWLR 843 Conspiracy Must be 1) agreement between two or more defendants 2) combine for tort to be committed 3) which causes economic harm to the plaintiff Unlawful means conspiracy (UMC) -In the case of UMC (unlawful means conspiracy), it is necessary to show that what the defendants agreed to do was to commit an unlawful act with the intention of harming the plaintiff. -example of UMC from Australia is Williams v Hursey (1959) 103 CLR 30 Conspiracy to commits acts may be criminal - Williams v Hursey (1959) 103 CLR 30 plaintiff and his son (the Hurseys), having joined the DLP, were kept from working on the waterfront by picketing and the threat of bodily harm by a union and its members.

At 78 Fullager J said:

There was a combination amounting to an actionable conspiracy of the kind best recognised in law, viz, a combination to do unlawful acts involving injury.

-note that while Williams was a case involving threats of personal injury, the economic harm of being kept out of employment was the essence of the claim Meaning of unlawful act House of Lords in Total Network SL v Her Majestys Revenue and Customs [2008] UKHL 19 But on the elements of Unlawful Means Conspiracy, the House was unanimous that such an action could be maintained even though the unlawful activity agreed upon was not actionable in tort. Perhaps the best judgment is that of Lord Walker, who gives an excellent overview of the law of both types of conspiracy at paras [65] ff. He concludes his discussion:

[94] From these and other authorities I derive a general assumption, too obvious to need discussion, that criminal conduct engaged in by conspirators as a means of inflicting harm on the claimant is actionable as the tort of conspiracy, whether or not that conduct, on the part of a single individual, would be actionable as some other tort. To hold otherwise would, as has often been pointed out, deprive the tort of conspiracy of any real content, since the conspirators would be joint tortfeasors in any event [95] In my opinion your Lordships should clarify the law by holding that criminal conduct (at common law or by statute) can constitute unlawful means, provided that it is indeed the means (what Lord Nicholls of Birkenhead in OBG at para 159 called "instrumentality") of intentionally inflicting harm.

-in Australia we seem to have the same position; see Handley JA in Fatimi Pty Ltd v Bryant [2004] NSWCA 140 (6 May 2004)
27 I agree with Campbell J that there is no requirement in the common law of Australia that the unlawful means for the purpose of this branch of the law of conspiracy must itself be tortious.

in Australia we seem to have the same position; see Handley JA in Fatimi Pty Ltd v Bryant [2004] NSWCA 140 (6 May 2004)
27 I agree with Campbell J that there is no requirement in the common law of Australia that the unlawful means for the purpose of this branch of the law of conspiracy must itself be tortious.

Meaning of intention

-intention to harm for the purposes of UMC presumably means, as it does for other intentional torts, either a full intention to do harm, or a wilful blindness as to harm. - no need to show a predominant purpose to cause harm, as there is in the case of LMC. The loss must be to the plaintiff personally and not merely his/her legitimate interests Reitano v Jones (2001) 54 NSWLR 661; PTY Homes Ltd v Shand [1968] NZLR 105. Defences Any defences to torts/acts conspired to
Lawful Means Conspiracy (LMC)

For if only one person had done it, it would not be actionable.
McKernan v Fraser (1931) 46 CLR 343 Conspiracy to prevent the plaintiff being engaged, it had been done for legitimate industrial purposes and not purely out of malice or disike.
71. In McKernan v Fraser [1931] HCA 54; (1931) 46 CLR 343 at 362 Dixon J said: "It appears now to be settled that, for a combination or acts done in furtherance of the combination to be actionable in such circumstances, the parties to the alleged conspiracy must have been impelled to combine, and to act in pursuance of the combination, by a desire to harm the plaintiff, and that this must have been the sole, the true, or the dominating, or main purpose of their conspiracy." and: "To adopt a course which necessarily interferes with the plaintiff in the exercise of his calling, and thus injures him, is not enough. Nor is it enough that this result should be intended if the motive which actuates the defendants is not the desire to inflict injury but that of compelling the plaintiff to act in a way required for the advancement or for the defence of the defendants' trade or vocational interests." At 408 Evatt J held that each member of the alleged conspiracy had to have the requisite intention or motive to harm the prospective plaintiff.