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Tort Liability For Pure Economic Loss Notes

Law Notes > Contract and Torts II Notes

This is an extract of our Tort Liability For Pure Economic Loss document, which we sell as part of our Contract and Torts II Notes collection written by the top tier of University Of Sydney students.

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Tort Liability for Pure Economic Loss Intentional Economic Torts Fraudulent misrepresentation is a statement made either knowing it to be false, without belief in its truth or recklessly, careless as to whether it be true or false: Derry v Peek (1889) Elements of tort of deceit: Magill v Magill (2006)

* The defendant made a false representation;

* The defendant made the representation with the knowledge that it was false, or that the defendant was reckless or careless as to whether the representation was false or not;

* The defendant made the representation with the intention that it be relied upon by the plaintiff;

* The plaintiff acted in reliance on the false representation; and

* The plaintiff suffered damage which was caused by reliance on the false representation. Silent does not amount to deceit: Magill v Magill (2006) Elements of injurious falsehood: Palmer-Bruyn and Parker Pty Ltd v Parson [2001]

* A false statement, concerning plaintiff's property / business

* Publication of that statement by the defendant to the third person;

* Calculated to induce the third party not to deal with the plaintiff

* Malice on the part of the defendant;

* Proof by the plaintiff of actual damage suffered as a result of the statement.

* Reasonable foreseeability does not operate as a means of limiting liability in the tort of injurious falsehood. Cause of action of injurious falsehood: Palmer-Bruyn and Parker Pty Ltd v Parson [2001]

* Either the defendant intended to cause the harm, or

* The harm was a natural or probable result of the publication of the statement. Elements of intimidation: AS v Murray [2013]

* There must be a threat by one person to use unlawful means (such as violence or a tort or a breach of contract) so as to compel another to obey his wishes: and

* A person so threatened must comply with the demand rather than risk the threat being carried into execution. It will often be appropriate for the court to grant an injunction to restrain the threatened commission of a tort where damages are an inadequate remedy: AS v Murray [2013]
Exemplary damages cannot be awarded for breach of contract. They are awarded to punish the defendant and to deter the defendant from committing similar conduct again: AS v Murray [2013]
Malice is an essential element in tortious interference with a contract: Lumley v Gye (1853) Elements of tortious interference with a contract are: Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001)

* A contract between the plaintiff and a third party;

* Defendant's knowledge of the contract;

* The defendant intentionally engaged in acts or conduct designed to induce the third party to breach the contract with the plaintiff;

* The defendant's conduct induced the third party to breach the contract with the plaintiff; and

* Damage to the plaintiff. In the case of the economic torts, in which intention is an element and damages are "at large", a defendant must be guilty of something bordering on the malicious before an exemplary damages will be granted: Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) Exemplary damages will not be available for the expectation damage where the remedy is available in contractual compensation itself: Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) An act, which infringes a legal right of another person, would be justified only if that act is 'reasonably necessary' to protect an 'actually existing superior legal right' of the person doing the act. An equal, rather 1

Tort Liability for Pure Economic Loss than superior, right is not sufficient to find justification, for example, proprietary rights vs contractual rights: Zhu v NSW Treasurer (2004) Elements of tortious conspiracy: Williams v Hursey (1959)

* Two or more persons

* Agree to effect an unlawful purpose

* Agreement has been carried out with an intention to cause harm to the plaintiff

* Harm has actually been caused to the plaintiff. In a conspiracy claim, it is necessary to prove that the defendant intentionally to cause harm to the plaintiff. It is not sufficient that the plaintiff has suffered harm as a result of the defendant's action: McKernan v Fraser (1931) The tort of misfeasance in public office is committed where damage is suffered as the result of an act done by a public officer with the intention of causing harm to the plaintiff or which he knows is or ought to know beyond power and which involves a foreseeable risk of harm: Northern Territory of Australia v Mengel (1995)

* The mental element in the tort is satisfied when the public officer engages in the impugned conduct with the intention of inflicting injury, or with knowledge that there is no power to engage in that conduct and that it is calculated to produce injury, or where he acts with reckless indifference as to the existence of power to support the impugned conduct: Northern Territory of Australia v Mengel (1995) Deceit

Derry v Peek (1889) 14 App Cas 337 If you say something you have honest belief, you won't be liable in deceit. -->No remedy with innocent misrepresentation. Knowledge:

* Satisfied with deliberately, for example, shut your eyes. ---> The knowledge element will be satisfied.

* Look from a reasonable person will foresee this. Reliance

* You do not to make the statement directly.

* If you intentionally speak to somebody with the false information with knowledge, you will suffer the consequence of your conduct.

* Section 119 of the Family Law Act 1975 (Cth) enabled either party to a marriage to bring proceedings in contract or in tort against the other party.

* Section 120 of that Act abolished the right of action for damages for adultery.

1. By DNA testing a man confirmed that he was not the biological father of either the second or the third child born during his former marriage.

2. He brought proceedings for the tort of deceit against his former wife for false representations contained in birth notification forms completed by her to the effect that he was the father of the children.

3. He claimed damages for personal injury in the form of anxiety and depression and for financial loss, including loss of earning capacity and money spent on the children under the mistaken belief that he was their father. Held, Judgement for the wife.

Magill v Magill (2006) 226 CLR 551 The modern tort of deceit will be established where a plaintiff can show five elements:

* first, that the defendant made a false representation;

* secondly, that the defendant made the representation with the knowledge that it was false, or that the defendant was reckless or careless as to whether the representation was false or not;

* thirdly, that the defendant made the representation with the intention that it be relied upon by the plaintiff;

* fourthly, that the plaintiff acted in reliance on the false` representation; and

* fifthly, that the plaintiff suffered damage which was caused by reliance on the false representation. Generally, the elements of the tort have been found to exist in cases which concern pecuniary loss flowing from a false inducement and the need to satisfy each element has always been strictly enforced, because fraud is such a serious allegation. At least one necessary integer of deceit was not made out. The Court of Appeal had correctly held that it was not reliance on the falsehoods proven that induced the husband to act to his detriment. The husband's belief in that he was the father owed more to an absence of disclosure to the contrary than to the evidenced misrepresentations, but silence does not sound in deceit and no other basis exists for imposing a duty of disclosure as to paternity on a party to a marriage. This state of affairs instanced the inherent difficulty of establishing deceit as to paternity. (by Heydon J) The appeal should be dismissed because reliance on the fraudulent representation found was not proved. However, the argument advanced in support of the wife's notice of contention that the tort of deceit does not extend to claims for damages arising from the paternity of children conceived and born during the course of a marriage must be rejected. 2

Tort Liability for Pure Economic Loss Deceit must be stated specifically. (Not by silence) (40Min, Recording) Intentional: Fraud requires that at the time you made the misrepresentation you intend to cause the harm to another. Any type of defamatory remark, either written or spoken, that causes pecuniary loss to an individual through disparagement of a particular business dealing.

1. The appellant, a surveyor, made an application to the Newcastle City Council on behalf of his client for the rezoning of certain land for the purposes of development.

2. The respondent, a member of the Council, opposed the proposal and circulated a letter purporting to come from the appellant, containing inducements and threats.

3. The damage of which the appellant complained was that his client terminated its retainer as a direct result of a newspaper article which reported the fact of the hoax letter.

4. The trial judge found, and the Court of Appeal agreed, that the loss of the client's business was caused by the publication of the newspaper article about the hoax, for which the respondent was not legally responsible. Held, in the present case, the damage suffered by the appellant was neither intended nor a natural and probable consequence of the initial publication of the false statement by the respondent. Accordingly, the making of the false statement was not causally linked to the damage suffered by the appellant. Judgement for the respondent.

1. The extortion began in about December 2011 when the plaintiff received, at work, an unsolicited email from a person who identified themselves as "Felicity Jones". In a series of emails the extortionist demanded $26,666 and threatened to reveal to the plaintiff's wife, family and employer personal information concerning the plaintiff, and in particular the fact that the plaintiff had joined an internet dating site, if the plaintiff did not pay the amount demanded. It was apparent from the email sent to the plaintiff that the sender had considerable information concerning the plaintiff and appeared to have obtained that information by hacking into the plaintiff's computer and mobile telephone.

2. In these proceedings, the plaintiff, who's name is the subject of a non-publication order under the Court Suppression and Non-Publication Orders Act 2010 (NSW), seeks to recover the sum of $26,666 which he says he paid to the defendant as a result of extortion.

3. The plaintiff also seeks orders that the defendant be restrained from communicating to any person any representation in relation to the plaintiff and that the defendant be restrained from communicating in any form with the plaintiff other than by communicating with the plaintiff's solicitors.

4. In addition, the plaintiff seeks exemplary damages against the defendant in respect of the extortion. Held, Judgment for the plaintiff, all the plaintiff 's claims are awarded.

Injurious Falsehood Palmer-Bruyn and Parker Pty Ltd v Parson [2001] HCA 69 Elements of "injurious falsehood" An action for injurious falsehood contains four elements:

* a false statement;

* publication of that statement by the defendant to the third person;

* malice on the part of the defendant;

* Generally, if there is an intent to injure, malice is satisfied.

* and proof by the plaintiff of actual damage suffered as a result of the statement. It is a requirement of such an action that either the defendant intended to cause the harm or that the harm be the natural and probable result of the publication of the statement. The role of intention in the tort of injurious falsehood requires that where the other elements of the tort are made out, a finding that the defendant intended the resulting consequences will be sufficient to support an award of damages against the defendant in respect of those consequences. The question of whether there is a sufficient relation between the damage intended and the damage suffered will generally depend upon whether the damage suffered was the natural and probable result of the false statement. The "grapevine effect" may provide the means by which a court may conclude that a given result was natural and probable. This will depend upon a variety of factors, such as the nature of the false statement and the circumstances in which it was published. The "grapevine effect" does not operate in all cases so as to establish that any republication is the natural and probable result of the original publication. Reasonable foreseeability does not operate as a means of limiting liability in the tort of injurious falsehood. The test for assessing whether it is reasonably foreseeable as a result of publication is no role in intentional torts. If you intentionally cause damages to somebody, you should be responsible for whatever has been caused by you, no matter whether or not it could be reasonably foreseeable. Look at the actual damages and then say, did the defendant intended to cause that damage?
Natural or probable result of his act, not some kind of foreseeability. The problem in this case that the council did not intend to affect the plaintiff 's business. And also the cancellation was not a natural or problem result of the defendant's conduct. Intimidation Duress & Intimidation

* Duress is more limited: transaction (including contract for consideration or gift)

* Gist of tort is damage, therefore compensation is for the damage, however, for duress, rescission. AS v Murray [2013] NSWSC 733 The essential elements of tort of intimidation were described by Denning MR in Morgan v Fry [1968] 2 QB 710 at 724 in these terms:

* There must be a threat by one person to use unlawful means (such as violence or a tort or a breach of contract) so as to compel another to obey his wishes: and

* A person so threatened must comply with the demand rather than risk the threat being carried into execution. 3

Tort Liability for Pure Economic Loss

In such circumstance the person damnified by the compliance can sue for intimidation.

1. Lumley (Plaintiff) entered into a contract with Miss Wagner for her to sing for three months at Plaintiff 's theatre.

2. Under the contract Wagner was not permitted to sing or use her talents elsewhere.

3. Gye (Defendant) then entered into a deal with Wagner for her to sing at his theatre for more money.

4. Plaintiff sued and asked that Defendant pay for damages for maliciously interfering with his contract with Wagner.

5. Defendant's demur was granted. Plaintiff appealed. Held, Judgment for Plaintiff.

1. A condition on test match tickets between the respondent, ARU and a travel agent, ATFS, purported to limit the rights of a ticket holder to transfer a ticket at a price higher than the amount for which it was sold by ARU administrator for commercial purposes.

2. The condition provided as follows: "It is a condition of sale that any ticket may not be resold at a premium or used for advertising, promotion or other commercial purposes without the prior consent of the
[ARU]. If a ticket is sold in contravention of this condition, the bearer of the ticket will be denied admission".

3. The appellants (THG and ICM) sold hospitality packages which included provision of hospitality and tickets for ARU's matches.They bought tickets from several persons and travel packages from ATFS, including tickets, and on sold the tickets or packages to members of the public at a price higher than the price for which tickets were sold by ARU.

4. The arrangement between ATFS and ICM was for the wholesale supply of tickets.

5. THG and ICM were ordered to pay exemplary damages.Their defences founded on contravention of Pt IV of the Trade Practices Act 1974 (Cth) (the TPA) and restraint of trade were dismissed. On appeal. Held,

* By buying a ticket at a premium, from an original purchaser with knowledge of the condition,THG and ICM wrongly induced a breach of the contract between ARU and the original purchaser. (105, 164)

* Exemplary damages cannot be recovered for breach of contract. (142, 143)

* However, in present case, exemplary damages should not have been awarded though there is a tortious behaviour. (145, 154, 164)
Appeal dismissed except for the exemplary damages part.

* In my opinion, however, the defendant has committed the tort of intimidation. By those unlawful threats, the defendant compelled the plaintiff to pay the sum of $26,666.The plaintiff is entitled to recover that sum as damages.

* In my opinion, the plaintiff is also entitled to injunctions in the form that he seeks.There are two bases for those injunctions.

* First, the plaintiff is entitled to an injunction to restrain threatened further conduct that would amount to the tort of intimidation.

* Second, the plaintiff is entitled to restrain the defendant from using confidential information that the defendant obtained improperly by hacking into the plaintiff's computer. It will often be appropriate for the court to grant an injunction to restrain the threatened commission of a tort where damages are an inadequate remedy. In the present case, damages are clearly not an adequate remedy.

* I am satisfied that an award of exemplary damages is appropriate in this case. The extortion involved a contumelious disregard of the plaintiff's rights. It was exacerbated by the fact that the defendant made a second attempt at extortion after the first had been successful. In my opinion, it is appropriate to order that the defendant pay $20,000 in exemplary damages.

* Exemplary damages cannot be awarded for breach of contract. They are awarded to punish the defendant and to deter the defendant from committing similar conduct again: see XL Petroleum NSW Pty Ltd v Caltex Oil Australia Pty Ltd
[1985] HCA 12 Inducing Breach of Contract

Lumley v Gye (1853) 2 E and B 216; 118 ER 749 Remedies for a breach of contract by law are confined to the contracting parties. If there be any remedy by action of a stranger to that contract, it must be on the case (in tort for trespass). Malice is an essential element of an action for interference in a contract as well as direct and proximate causation.

* Miss Wagner has contracted to do work for Plaintiff within the meaning of this rule, and where a party has contracted to give his personal services for a certain time to another; the parties are in the relation of employer and employed, or master and servant.

* Courts are justified in applying the principle of action for enticing away servants to a case where the defendant maliciously procures a party, who is under a valid contract to giver her exclusive personal services to the plaintiff for a specified period, to refuse to give such services during the period for which she had so contracted, whereby the plaintiff was injured. The elements of tortious interference with a contract are

* A contract between the plaintiff and a third party;

* Defendant's knowledge of the contract; (Intent or wilful indifference)

* Know the contract only, and you have an intention

* Do not have to know the precise term of the contract.

* Wilful blind can satisfy the element of "knowledge".

* The defendant intentionally engaged in acts or conduct designed to induce the third party to breach the contract with the plaintiff;

* The defendant's conduct induced the third party to breach the contract with the plaintiff; and

* Damage to the plaintiff. Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 Condition on test match tickets

* The language of the condition points to a promise rather than a condition precedent or a delimitation of grant. The expression "a condition of sale" suggests the notion of an important promise, made as part of the contract of sale. The second sentence then specifies one of the consequences of resale "in contravention" of such a promise.

* The condition draws a distinction between the consequences of sale contrary to the prohibition and the consequences of use contrary to the prohibition. It is only in cases of resale at a premium that denial of admission is expressly provided as a 4

Tort Liability for Pure Economic Loss

1. An organisation called "Olympic Club" was established for the purpose of entering into agreements relating to the distribution, marketing and sale of goods and services associated with the Olympic Games.

2. A third party company was trustee of the club.

3. The appellant entered into an agency agreement with the trustee company and was thereby authorised to sell international memberships in the club in China and in so doing use the indicia and images of the Olympic Games (however, the using was unauthorised).

4. The trustee company later suffered financial difficulties and ownership of the club was transferred to Sydney Organising Committee for the Olympic Games (SOCOG).

5. The trustee company and SOCOG executed a deed of release and terminated the agency agreement.

6. When the appellant protested the termination, SOCOG asserted that the appellant had breached the agency agreement by using the indicia and images of the Olympic Games, and that the termination was justified.

7. Following a decision in favour of the appellant in the Supreme Court of New South Wales, SOCOG acknowledged that it had knowingly induced the trustee company to terminate its agency agreement with the appellant. The issue was whether that inducement was justified.

* The Court of Appeal held that the agency agreement wrongly permitted the appellant to use the indicia and images of the Olympic Games. SOCOG's actions were therefore justified because the trustee company had no authority to grant to the appellant a right to the use of the indicia and images. Held, Judgement for the appellant. SOCOG was not entitled to induce the trustee company to terminate the contract since SOCOG does not have the proprietary right over the indicia and images.

sanction. That distinction suggests that the sanction for prohibited use are the ordinary remedies for breach of a contractual promise.

* The right of admission conferred by the contracts is intended to be transferable. However, it does not necessarily follow that such a subsequent bearer has a contractual right to admission.

* The condition makes it clear that if there has been a "contravention" of the condition, the respondent would be entitled to deny admission to any bearer. Such a provision does not detract from the promissory nature of the first sentence.

* In the circumstances, the condition constituted a term of the contract. Exemplary damages --- Awarded in connection with economic torts

* The award of exemplary damages is an extraordinary remedy. When awarded, it gives a windfall to the plaintiff. In the case of the economic torts, in which intention is an element and damages are "at large", a defendant must be guilty of something bordering on the malicious before the remedy will be granted. If that were not so, exemplary damages would be granted whenever a defendant commits an intentional tort.

* In tort, account of profits is not a remedy available when the account is not awarded to compensate for actual or presumed loss. A plaintiff cannot claim a windfall to prevent a tortfeasor from profiting from the wrong, except where exemplary damages are available and it is proper that illicit profits are taken into account in assessing the award Loss recoverable for breach of contract or tort

* The position in Australia is that loss recoverable for breach of contract is limited to that laid down in Robinson v Harman (1848) 154 ER 363 . That is, the aggrieved party is entitled only to compensation. If the aggrieved party has suffered no loss, then there is no entitlement to compensation.

* In an appropriate case, the aggrieved party may be able to recover (by a claim in restitution) benefits made available to the wrongdoer. Presently, however, it would be inconsistent with the current principles laid down by the High Court of Australia to confer a windfall on a plaintiff under the guise of damages for breach of contract.

* A victim of a tort is to be placed in the same position as he or she was before the tort was committed. It is not possible to slot an account of profits into the general framework of remedies available in tort, when the account is not awarded to compensate the plaintiff for his or her actual or presumed loss. Inducement of breach of contract

* The gravamen of the tort of inducing breach of contract is intention. Although the requirement of knowledge of the contract is sometimes discussed as if it were a separate ingredient of the tort, it is in fact no more than an aspect of intention.

* The requirement that the alleged tortfeasor have sufficient knowledge of the contract is a requirement that that person have sufficient knowledge to ground an intention to interfere with contractual rights. Both the intention to interfere with contractual rights and the necessary supporting knowledge of the contract refer to the state of mind of the alleged tortfeasor. Zhu v NSW Treasurer (2004) 218 CLR 530

* In accordance with Independent Oil Industries Ltd v Shell Co of Australia Ltd (NSW) 394 (1937) 37 SR , the defence of justification rests upon the principle that an act, which infringes a legal right of another person, may be justified if that act is 'reasonably necessary' to protect an 'actually existing superior legal right' of the person doing the act. An equal, rather than superior, right is not sufficient to find justification.

* An 'actually existing superior legal right' is a right in real or personal property. It is not merely a right to contractual performance. A right in real or personal property, being a proprietary right, is superior to a right to contractual performance. Superiority is conferred by the proprietary nature of that right; temporal priority of pure contractual rights is not sufficient.

* In order for an act to be 'reasonably necessary' to protect an actually existing superior legal right, attention must be drawn to how a reasonable prudent person would have behaved if they were in the position of the person doing the act.

* In the present case, SOCOG did not have any superior legal rights. Both SOCOG and the appellant had contractual rights. In order for SOCOG's rights to be superior, they would have to be in the nature of proprietary rights. In any case, the actions taken by SOCOG were not reasonably necessary to protect its rights. Further, the fact that the terms of the agency agreement were inconsistent with the SOCOG's exclusive right to use the indicia and images of the Olympic Games, did not justify its procurement of the termination of the agreement. There were various other, more reasonable, ways in which SOCOG could have sought to bring the agency agreement to an end. Accordingly, the defence of justification was not open. More useful than the Hospitality case.

5 Tort Liability for Pure Economic Loss

1. The substance of three actions brought in the Supreme Court of Tasmania was that FJ Hursey and DVA Hursey sought against defendants who included individuals and the Waterside Workers' Federation of Australia and the Hobart branch of that federation, declarations and injunctions and other relief on the footing that a political levy imposed by the Hobart branch of the federation upon its members to assist the Australian Labor Party in an election campaign had been invalidly imposed, and, in addition, damages for conspiracy, and that individual members of the Hobart branch of the federation sought injunctions and declarations against the Australian Stevedoring Authority and the Hurseys on the footing that, the Hurseys having ceased to be members of the branch, the members of the branch were entitled to preference in employment as against the Hurseys.

2. The defendant's action included picketing by human barricades of members and supporters of the federation, assaults, threats and insults by individuals in the picket lines, and after the picketing ceased, the walking off the job by members of the federation selected to work with the Hurseys so that in each case they were dismissed from their employment. Held, that the Hurseys had a cause of action for conspiracy based upon acts done pursuant to a combination to prevent them by unlawful means from presenting themselves for employment in stevedoring operations.

1. The defendant was the secretary of the Federated Seamen's Union.

2. The plaintiffs, members of that Union, refused to pay Union dues, and were active in the formation of a rival organisation of seamen.

3. At Port Adelaide the plaintiffs, with six other men, were selected as members of the crew of a ship.

4. Before they had signed the ship's articles the defendant induced the six other men to refuse to sail with the plaintiffs, and by threatening that no other persons would offer themselves for selection as members of the crew on the ship, induced the representatives of the shipowner to refuse to engage the plaintiffs or allow them to sign the ship's articles.

5. There was some evidence of ill-feeling between the defendant and the plaintiffs.

6. In an action for damages brought by the plaintiffs against the defendant for inducing the master and owners of the ship to break their contracts with the plaintiffs, alternatively for maliciously coercing the master and owners of the ship not to enter into contracts with the plaintiffs, and alternatively for conspiracy to injure the plaintiffs.

Whether and when you would be justified in inducing in breach of a contract?
The accept SOCOG obligation to protect IP which arises from the contractual obligation because they are an organisation who master the Olympic affairs. However, IOC can terminate the Games at anytime. Though in some circumstances may be justified, however, not available to SOCOG. Breach of contract is a right in persum.

* In very rare circumstance, you actually have the right to get the contract performed.

* Also in some circumstances, you can get injunction.
Therefore there is more to contract than other things.
Contract law is a quasi-proprietary nature. Rights in rem: Rights in the thing itself.

* If something is a property, you get bunch of rights associated with it. The only thing that will superior than a quasi-proprietary right is a full-proprietary right. The superior rights must be related to their land, property. Conspiracy and Causing Loss by Unlawful Means

Elements of tort of conspiracy: (Compare with the elements of conspiracy, only have the first three criteria)

* Agreement between two or more people

* Agreement must be performed

* The plaintiff has suffered damage
Agree to perform an unlawful act
Intend to cause the harm The tort will not be committed when the member of conspiracy tries to protect their interest. Conspiracy Using an unlawful means Williams v Hursey (1959) 103 CLR 30 If two or more persons agree to effect an unlawful purpose, whether as an end or as a means to an end, and in the carrying out of that agreement damage is caused to another, then those who have agreed are parties to a tortious conspiracy. Elements of conspiracy:

* Two or more persons

* Intentionally agree to effect an unlawful purpose

* Agreement has actually been carried out

* For tort law, you actually have to do or partly do it.

* Because if you don't carry it out, then there will be no damage to the plaintiff --> Therefore, the last criteria will not be satisfied.

* Cause damage to the plaintiff.

* If something was done unlawful

* Something unlawful: something commit as a tort, Judgment: Not everything that the defendant did was unlawful. Whether or not refusing to work with somebody is unlawful? ---> Not However, you can have a combination with both, lawful act and unlawful act, then it would suffice a tortious conspiracy. Using an lawful means McKernan v Fraser (1931) 46 CLR 343 6

Tort Liability for Pure Economic Loss

* The "picking-up" or selection of the plaintiffs was merely preliminary to a contract and did not itself amount to a contract; therefore, no contractual relations were established between the plaintiffs and the shipowners, and, consequently, no breach of such relations was procured by the defendant.

* For a combination or acts done in furtherance of the combination to be actionable where the end is not in itself unlawful and the means are not unlawful and no threat of illegality is made in furtherance of the combination, 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 this must have been the sole, the true, or the dominating or main purpose of their conspiracy: it is not enough to adopt a course which necessarily interferes with the plaintiff in the exercise of his calling and thus injures him; nor is it enough that this result should be intended if the motive which actuated the defendants was 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; and what actuated the conduct of the Union branch and of the defendant was to benefit themselves in obtaining employment, and, therefore, the cause of action in conspiracy was not established. Ask another not to work with the plaintiff does not mean it is an unlawful act. The claim for intimidation also failed, because the intimidation must contain an unlawful act. Therefore, in terms of an act which is not unlawful itself, there must have a malicious purpose.

1. Members of the Mengel family owned two cattle stations in the Northern Territory, Neutral Junction and Banka Banka.

2. They had purchased Banka Banka in 1987 for approximately $3 million, financing the purchase by a bank loan.

3. They intended to repay $1 million from the sale of cattle by the end of the 1988 season.

4. In September 1988, a stock inspector employed by the Northern Territory Department of Primary Industry and Fisheries took blood samples from heifers mustered for sale at Neutral Junction.

5. One heifer tested positive for brucellosis.

6. The inspector told the Mengels that as a result of the test their breeder cattle could only be moved to an abattoir for immediate slaughter.

7. Further tests were conducted on cattle at Banka Banka by the inspector and the acting chief veterinary officer and chief inspector of stock for the Territory.

8. Twenty-two tested positive and the inspectors informed the Mengels that the cattle were subject to similar restrictions upon movement.

9. As a result of the restrictions the Mengels did not sell their breeder cattle as planned and, because of dry conditions, they had to import feed and arrange for cattle to be agisted.

10.To meet their obligations to the bank they had to sell some steers earlier than planned.

11.The inspectors had no power to impose restrictions on the movement of the cattle, although they believed that they had that power.

12.The inspectors were aware that the Mengels needed to sell some cattle by the end of the 1988 season to make repayments to the bank. Held, that the owner was not entitled to recover against the inspectors or the Territory through an action for damages on the case either for the tort of misfeasance in public office or for the tort of intimidation. Appeal allowed.

Causing loss by unlawful means Northern Territory of Australia v Mengel (1995) 185 CLR 307

* The principle propounded in Beaudesert Shire Council v Smith (1966) 120 CLR 145 (to the effect that, independently of nuisance but by an action for damages on the case, a person who suffers harm or loss as the inevitable consequence of the unlawful, intentional and positive acts of another is entitled to recover damages from that other) is no longer to be regarded as good law.

* The tort of misfeasance in public office is committed where damage is suffered as the result of an act done by a public officer with the intention of causing harm to the plaintiff or which he knows is or ought to know beyond power and which involves a foreseeable risk of harm.

* The mental element in the tort is satisfied when the public officer engages in the impugned conduct with the intention of inflicting injury, or with knowledge that there is no power to engage in that conduct and that it is calculated to produce injury, or where he acts with reckless indifference as to the existence of power to support the impugned conduct. Accordingly, where stock inspectors employed by the appellant, without statutory or other authority, wrongly quarantined the respondents' stock whereby the respondents suffered loss, but the findings at first instance went no further than to show that the inspectors gave directions without power while acting in good faith, and failed to show that the inspectors knew that they lacked power or were recklessly indifferent to having such power, no pleaded cause of action was available to the respondents.

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