Notes of Cases
| Published date | 01 July 1968 |
| Date | 01 July 1968 |
| DOI | http://doi.org/10.1111/j.1468-2230.1968.tb01204.x |
NOTES
OF
CASES
INDUCING
BREACH
OF
CONTRACT
AND
UNLAWFUL
INTERFERENCE
WITH
TRADE
TEE economic common law torts
go
marching on, and their judi-
cial development, which began anew in the
lQGOs,
bounds ahead
with unpredictable results for commercial and, especially, indus-
trial relations. In respect
of
the latter, it must surely be accounted
unfortunate if, just at the moment when the Donovan Royal
Commission is finalising its Report, the judges see
fit
to open up
new avenues to liability in trade disputes. The development has
now been continued by the Court of Appeal in
Daily Mirror News-
papers Ltd.
V.
Gardner
and, in Scotland, by Lord Milligan
in
the
second decision of
Square Grip Reinforcement Ltd.
v.
AZacdonald.2
The
Daily Mirror
case concerned two distinct torts. After
a
price increase, the newspaper demanded that wholesalers take
a
smaller margin
of
profit; and the wholesalers therefore made the
same request
of
the retailers. The National Federation of Retail
Newsagents objected and decided on
"
a complete and utter boy-
cott of the
Daily Mirror
for one complete week, as an initial step
";
sent out
''
stop notices
"
for its members to send to wholesalers
discontinuing supplies
of
the
Daily Mirror
from March
18
to
23;
and distributed posters to be displayed for customers to read say-
ing:
('
Trade Dispute.
No
Daily Mirror.))
s
Both the Federation
and the
Daily Mirror
had
"
good commercial reasons for the stand
))
they took.' But had the Federation acted unlawfully in
a
way
which entitled the
Daily Mirror
to an injunction? Cooke
J.
and
Phillimore
J.
had
so
held, and the
Court
of Appeal agreed, because
(a) the Federation had interfered with the plaintiffs' trade by
unlawful means; and (b) the Federation had knowingly and inten-
tionally induced breaches of contract to the damage of the plaintiffs.
(a) As to the first tort, it seems to be established law that if
defendants use
"
unlawful means
)'
intentionally to damage the
trade of the plaintiff, they are liable even if they do not induce
actual breach of an existing contract.s The tort usually merges
1
[l9G8] 2
W.L.R.
1239
(C.A.). Also reported
[1968
2
All
E.R.
163.
2
10G8
S.L.T.
65
(No.
2).
[For
reasons
of
space the note
on
this decision is
held
over
until the next
issue.]
The deciaions have appeared at a time when
labour law litigation has flared up strikingly. At the time
of
writing
judg-
ment is awaited from the Court
of
Appeal
in
Morgan
V.
Fry,
decided
b
Widgery
J.
[1967]
2
All E.R.
886.
See
too Stamp
J.
in
Torquay
Hotri
Ltd.
v.
Cousins,
The
Times,
May
24,
1'368
(where liability was imposed for
interference with rommercial contracts short
of
inducing a breach).
3
r196Al
2
W.L.R.
1230,
1247.
4
[1068] 2
W.L.R.
1230,
per
Lord
DenningnM.R: at p.
1248.
5
This
is
one ratio
of
the speech of Lord eid
in
Stratford
v.
Lindley
[l965]
A.C.
269, 324
("
interference
with
business is tortiom
if
any unlawful means
are employed," referring to
future
contracts).
440
JULY
1968
NOTES
OF
CASES
441
into
(‘
conspiracy to use unlawful means.” Were
unlawful
means
used here? The Court
of
Appeal held that the answer lay in the
status of the arrangement made by the Federation to effect its
purposes. By virtue of the Restrictive Practices
Act
1956,
s.
6
(7),
the recommendation to retailers was a
((
relevant restriction
)’
under
that Act and an arrangement which was therefore registrable under
the Act and which could be brought before the Restrictive Prac-
tices Court. Furthermore, the
“
inevitable result
”
of earlier
authority was that such ‘a
“
restriotion is to be regarded as contrary
to
the public interest although not yet formally
so
declared by the
Restrictive Practices Court.”
‘
The Court
of
Appeal was prepared
to take its own view as to the effect of the
1956
Act and decided that
the restriction could not achieve legitimacy vi,a the
(‘
gateway
))
of
section
21
(1)
(d)
of the
1950
Act. This section allows proof in the
Restrictive Practices Court that a restriction is
((
reasonably necessary to enable the persons party to the agree-
ment to negotiate fair terms for
. .
.
the acquisition of goods
from any one person
.
.
.
who controls a preponderant part of
the trade
or
business of
.
. .
supplying such goods.’’
It
was argued for the defendants that the
Daily
Mirror
was a sub-
sidiary of International Publishing Corpn., a company which con-
trolled a preponderant part of the trade, supplying the goods
through its group. Unfortunately section
21
(1)
(d)
speaks of
negotiation of fair terms for acquisition
of
goods by buyers from
sellers. The Federation and its members did not buy from
I.P.C.
True, section
8
(9)
of
the Act enacts that subsidiary and parent
companies are to be treated ,as a single person for some parts of
the statute; but those do not include section
21
(1)
This con-
tention of the defendants therefore failed.
Here, then, was an agreement deemed to be
‘(
contrary to the
public interest
)’
and to be treated
as
if it were found to be
so
by
the Restrictive Practices Court. With varying degrees of enthusiasm
their Lordships assumed that this meant
it
constituted in tort
((
unlawful means.” But it is to be remembered that the legisla-
ture expressly refrained from declaring such agreements illegal and
only dubbed them
((
void.”
lo
There is authority for saying that
not every action which the law finds (to use a neutral word)
improper constitutes
66
unlawful means
”
in tort. For example, use
6
Re
National
Pe$ration
o
Retarl
Newsagent,s,
etc.,
Agreement
[19G5]
L.R.
5
R.P.
236
(the
[1968]
2
W.L.R.
1239,
pef
Russell
L.J.
at
p.
1254.
As
to
registrable arrange-
ments and the relationship between the High Court and
the
Hestrictive
Practices Court
see
Whiteman
(1966) 29
M.L.R.
563
and
(1967)
30
M.L.R.
398.
8
Why
this is
so
ia not clear: perhaps an amendment
to
the pending Restrictive
Trade Practice!, Bill
1968
will provide,for this
pint.
Russell
L.J.:
as
at
present advised
lo
8.
20
(3)
of
the
1965
Act, which allows the court to m.ake orders restraining the
parties
from
giving effect to
the
restrictions found contrary to the public
interest.
Romeo
’
decision).
[1968]
2
W.L.R. at
p.
1255.
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