Analysis

Pages278-339
Published date01 May 2009
Date01 May 2009
DOI10.3366/E1364980909001528
<italic>GLOBAL RESOURCES LTD v MACKAY</italic>

In OBG Ltd v Allan,1

[2007] UKHL 21, [2008] 1 AC 1. The case has received extensive academic commentary: e.g. J Thomson, “Redrawing the landscape of the economic wrongs” (2008) 12 EdinLR 267; H Carty, “The economic torts in the 21st century” (2008) 124 LQR 641; S Balthasar, “Economic torts – Vermögensschäden und der Schutz relativer Rechte im englischen law of torts” 2008 Zeitschrift fűr Europäisches Privatrecht 864.

the House of Lords radically reformulated the economic delicts. Global Resources Group Ltd v Mackay2

[2008] CSOH 148, 2009 SLT 104.

provided the first opportunity for judicial consideration of this decision's implications for Scotland

Mr Mackay was an employee of G & D Pallets Ltd (GDP), which contracted to provide his services as a business consultant to the pursuers. His “whole… time, attention and abilities” were to be devoted to the pursuers’ business and he and GDP were bound to maintain commercial confidentiality. The pursuers averred that Mr Mackay had worked for a competitor and downloaded commercially sensitive documents on to his laptop, putting GDP in breach of both obligations. By doing so in the knowledge of GDP's contract with the pursuers, they argued, Mr Mackay induced GDP to breach the contract and was therefore liable to them in delict.

The matter was not finally disposed of because Lord Hodge felt that the pleadings as they stood justified neither dismissal for irrelevancy nor a proof. He did, however, make it clear that the facts averred did not disclose an induced breach of contract. In doing so, he produced a summary of Scots law on the point admirable for its clarity and brevity.

Lord Hodge demonstrated that the Scottish courts had developed the delict of inducing breach of contract by extensive reference to English authorities. On that basis, he was content to follow the approach in OBG.3

Paras 7-10.

He went on to identify five “characteristics” which appear to be the essential elements of the delict:4

Paras 11-14.

breach of contract;

knowledge on the part of the inducing party that this will occur;

breach which is either a means to an end sought by the inducing party or an end in itself;

inducement in the form of persuasion, encouragement or assistance;

absence of lawful justification.

These might be reformulated as a typical case

X has a contract with Y;

Z encourages, persuades or assists Y to do something which breaches his contract with X;

Z knows that Y's action will be a breach of contract;

unless there is some other circumstance justifying Z's conduct, Z is liable to X in delict.

The pursuers fell short on (c). Since Mr Mackay's actions brought the breach about directly, without the need for any further action by GDP, he could not be said to have persuaded, encouraged or assisted GDP's breach.5

Paras 15, 18. See OBG at paras 174-180 per Lord Nicholls of Birkenhead.

A PARALLEL RULE?

The typical form of induced breach calls to mind the so-called “offside goals rule” in property law.6

See, most recently, Advice Centre for Mortgages v McNicoll [2006] CSOH 58, 2006 SLT 591 and Gibson v Royal Bank of Scotland [2009] CSOH 14.

While the rule's rationale and certain detailed questions of application remain controversial,7

See e.g. S Wortley, “Double sales and the offside trap: some thoughts on the rule penalising private knowledge of a prior right” 2002 JR 291; R G Anderson, Assignation (2008) paras 11-04-11-30; D L Carey Miller with D Irvine, Corporeal Moveables in Scots Law, 2nd edn (2005) para 8.31.

the basic concept is clear:8

But cf Gibson v Royal Bank of Scotland [2009] CSOH 14 at para 43 per Lord Emslie.

X has a personal right...

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