GLOBAL RESOURCES GROUP Ltd v ALEX MACKAY Defender
| Jurisdiction | Scotland |
| Judge | Lord Hodge |
| Neutral Citation | [2008] CSOH 148 |
| Year | 2008 |
| Docket Number | CA24/08 |
| Date | 21 October 2008 |
| Published date | 21 October 2008 |
| Court | Court of Session (Outer House) |
| OUTER HOUSE, COURT OF SESSION [2008] CSOH 148 | |
| CA24/08 | OPINION OF LORD HODGE in the cause GLOBAL RESOURCES GROUP LIMITED Pursuers; against ALEX MACKAY Defender: ________________ |
Pursuers: Napier QC; Brodies LLP
Defenders: McBrearty; HBJ Gateley Wareing LLP
17 October 2008
[1] In this action the pursuers seek damages from the defender alleging that he committed the delict of inducing breach of contract. In a debate in which the defender sought to have the action dismissed as irrelevant the main issue which arose was the nature and scope of that delict.
The averred factual background
[2] The pursuers' averments which for the purpose of the debate I must take pro veritate disclosed the following factual background. The pursuers, which provide engineering services and personnel to the oil industry, (or a company within the pursuers' group) employed the defender as a business development manager. The pursuers and the defender agreed that the defender would cease to be an employee and that instead he would provide his services through G & D Pallets Limited ("GDP"), a company of which he was and is a director. Thus on 27 August 2007 the pursuers entered into a contract with GDP by which GDP undertook to provide the pursuers with the defender's services as a consultant with effect from 1 September 2007 (clause 1). By clause 2 of the contract the defender was to provide business development services to secure for the pursuers additional work in their field of activity. Clause 5 of the contract provided: "During the continuance of this consultancy, [GDP] will ensure that [the defender] uses his best endeavours to promote the interests of [the pursuers], the Group and its subsidiaries (if any) and that, while providing services for [the pursuers], he will devote the whole of his time, attention and abilities to the business and affairs of [the pursuers], the Group and its subsidiaries". Clause 6 provided that GDP and the defender would not disclose trade secrets or confidential information during and after the period of the defender's consultancy.
[3] The pursuers aver that GDP "is responsible in law for the conduct of the defender during the period of the consultancy agreement". The substance behind that bald statement is not clear. In any event the pursuers aver that in March 2008 they learned that the defender had acted on behalf of a rival business, Port Services Engineering Limited, and had assisted them to secure work for which the pursuers were bidding. They also aver that on 24 February 2008 the defender downloaded onto his laptop computer confidential information such as tender documents and technical drawings which were the property of the pursuers and which were commercially sensitive. The pursuers aver that the defender by so acting "unlawfully induced and caused breach or breaches of the contract between" the pursuers and GDP "in circumstances where he was aware of its existence and where he knew, or was recklessly indifferent, that by acting as he did he would bring about its breach".
Parties' Submissions
[4] Mr McBrearty on behalf of the defender accepted that the averred acts of the defender would if true put GDP in breach of its contract with the pursuers. He submitted however that the action should be dismissed as the pursuers had not relevantly averred a delictual case of inducing breach of contract. A person committed the delict when he induced or procured another person to break his contract. There were no averments that the defender had actively associated with GDP by persuading them to break their contract with the pursuers or at least by facilitating active steps on the part of GDP to break their contract. It was not sufficient to establish this delict that a breach of contract by GDP was a foreseeable consequence of the defender's actions. He referred to British Motor Trade Association v Gray 1951 SC 586, British Motor Trade Association v Salvadori [1949] 1 Ch 556, OBG Ltd v Allan [2008] 1 AC 1, Square Grip Reinforcement Co Ltd v MacDonald 1968 SLT 65 and Findlay v Blaycock 1937 SC 21. He also referred to definitions of "induce" and "procure" in the Oxford English Dictionary. The pursuers' complaint was that the defender had done things which GDP had agreed to prevent in their contract with the pursuers. This did not amount to inducing a breach of contract.
[5] Mr Napier QC for the pursuers submitted that the delict of inducing breach of contract was committed where a defender caused another to break his contract in the knowledge of the terms of that contract which were being broken by his conduct. There was no rule that only inducement in the sense of deliberate persuasion of another to act in breach of his contract would suffice. The necessary intention existed if the wrongdoer knew that breach would result from what he was doing. While it was not sufficient to establish commission of the delict that the breach of contract was merely a foreseeable consequence of the wrongdoer's acts, it was not necessary that the wrongdoer desired the breach as an end in itself or as a necessary means to another end. In addition to the cases to which Mr McBrearty referred, Mr Napier referred to Rossleigh Ltd v Leader Cars Ltd 1987 SLT 355 and D C Thomson Ltd v Deakin [1952] 1 Ch 646, CA.
[6] Both parties took the approach that there were no material differences between the laws of Scotland and England in relation to this delict or tort.
Discussion
[7] In BMTA v Gray (above) Lord Russell (at p.603) approved a concession by counsel that "by the law of Scotland an actionable wrong is committed by one who intentionally and without lawful justification induces or procures someone to break a contract made by him with another, if damage has resulted to that other, provided the contract creates contractual relations recognised by law". Until then, as the Lord President (Cooper) pointed out (at p.599), Scots law had reported instances of the delict only in the field of employment contracts and of a promise to marry (viz. Findlay v Blaycock). In accepting that there was a wider rule, the Lord President looked to the reasoning of Roxburgh J in BMTA v Salvadori, as did Lord Russell. The Court held that the essence of the wrong was found in knowing and unjustifiable interference in the contractual relations of others.
[8] In BMTA v Salvadori, Roxburgh J at p.565 spoke of the interference involving an active association of some kind in the breach of contract. He opined that it was enough if the interfering party, knowing of the contractual obligation, took an active step which facilitated a breach of the contract. Thus if the contracting party were willing to break his contract without needing persuasion to do so, the interfering party's facilitation of that breach, for example by being a counterparty to an offending contract, would be sufficient.
[9] In the other Scottish cases to which I was referred the judges used dicta from English authorities to explain the delict. Thus in Findlay v Blaycock, in which the court dealt with the issue of lawful justification, holding that a father was presumed to be acting out of parental duty in inducing his minor son to break his promise to marry, the Lord President (Normand) referred to dicta on that issue in the Court of Appeal and the House of Lords in Glamorgan Coal Co v South Wales Miners' Federation ([1903] 2 KB 545 and [1905] AC 239). In Square Grip Reinforcement Co Ltd, which was concerned with the scope of the protection provided by the Trade Disputes Act 1906, Lord Milligan in discussing the delict referred to several English...
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