The tort of unlawful interference with economic relations has
also been referred to as "interference with a trade or
business by unlawful means", "intentional interference
with economic relations", "causing loss by unlawful
means" or as the Supreme Court of Canada decided in the case
of A.I. Enterprises Ltd. v. Bram Enterprises
Ltd., simply as the "unlawful means" tort.
The 1793 case of Tarleton v. M'Gawley (1793) serves
as an example of the tort: the defendant, the master of a trading
ship, fired its cannons at a canoe that was attempting to trade
with its competitor, the plaintiffs' trading ship, in order to
prevent it from doing so. The plaintiffs were able to recover
damages for the economic injury resulting from the defendant's
wrongful conduct toward third parties (the occupants of the canoe)
which had been committed with the intention of inflicting economic
injury on the plaintiffs.
The unlawful means tort allows a plaintiff to sue a defendant
for economic loss resulting from the defendant's unlawful act
against a third party. In order to found liability to the
plaintiff, the defendant must use unlawful means and the defendant
must intend to harm the plaintiff through the use of the unlawful
means. Important from the A.I. Enterprises Ltd. v. Bram
Enterprises Ltd. case is that the conduct complained-of must
give rise to a civil cause of action by the third party (or would
do so if the third party had suffered loss as a result of that
conduct) before a plaintiff can recover under the
unlawful means tort. If the third party does not suffer a loss, the
plaintiff cannot recover from the defendant on the basis of the
unlawful means tort.
The case in question involved a group of family members who,
through their companies, owned an apartment building. The majority
of them wanted to sell it, but one of them did not. He took a
series of actions to thwart the sale. The result was that the
ultimate sale price was nearly $400,000 less than it otherwise
might have been. When the majority sued to recover this loss, the
main question was whether the dissenting family member and his
company were liable for what the trial judge referred to as the
tort of unlawful interference with economic relations.
The "intentional" aspect of the tort remains despite
the name change. The defendant must intend to cause
economic harm to the plaintiff as an end in itself or the intention
to cause economic harm to the plaintiff. It is the intentional
targeting of the plaintiff by the defendant that justifies
stretching the defendant's liability so as to afford the
plaintiff a cause of action. This would be a factual finding
made by a trial judge.
The main issue before the Supreme Court was what the
"unlawful" component of the tort meant. It held that to
be unlawful, the conduct of the defendant would have to be
actionable by the third party if it suffered a loss as a result of
the conduct. If there was no loss, then the conduct would not be
unlawful. The Supreme Court held that there could be no principled
exceptions to this rule on the basis that to allow exceptions would
add unnecessary uncertainty to the tort and to commercial relations
in Canada. To that end, the Supreme Court was informed by past
jurisprudence that held that the law had never recognized a
sweeping right to protection from economic harm and that the common
law had traditionally been reluctant to develop rules about fair
The Supreme Court referred to the fact that the common law in
the Anglo-Canadian tradition had generally promoted legal certainty
for commercial affairs. To found a tort on "commercial
morality" or to impose liability for malicious conduct alone
would not promote legal certainty.
The Supreme Court supported a narrow definition of
"unlawful means". The tort does not seek to create new
actionable wrongs but simply to expand the range of persons who may
sue for harm intentionally caused by existing actionable wrongs to
a third party.
Noteworthy was the court's discussion of the fundamentally
different approach that Quebec's civil law takes to the
problem. Quebec has an "abuse of rights" doctrine that is
rooted in the Civil Code of Québec, which provides
in art. 6 that "[e]very person is bound to exercise his civil
rights in good faith" and in art. 7 that "[n]o right may
be exercised with the intent of injuring another".
The civil law of Quebec goes farther than the Anglo-Canadian
unlawful means tort: under the civil law, liability may be imposed
on the defendant for conduct that is otherwise lawful but which is
done with the intent to injure the plaintiff or in a manner
inconsistent with the social ends of that right.
In the case at hand, however, there was no harm to the third
party, which barred recovery by the plaintiff for its damages.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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