Documentation:Torts/Unlawful means

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Unlawful interference with economic interests
The tort of unlawful interference with economic interests concerns three-party situations where a defendant commits an unlawful act against a third party to intentionally cause economic loss to a plaintiff.[1] It has also been referred to as the tort of causing loss by unlawful means or interference with economic relations.[2] This economic tort holds the defendant liable to the plaintiff for the unlawful act committed against the third party.[3] The tort serves to extend liability for other torts by "expand[ing] the range of persons who may sue for harm intentionally caused by existing actionable wrongs to a third party".[4]

The development of the unlawful means tort

Painting of a naval battleship fleet on the water with the ships firing right side cannons. Three planes overhead in the cloudy blue skies.
In Tarleton v. M'Gawley, the defendant was found liable for unlawfully interfering with the plaintiff's economic interests after firing cannons at the canoe trying to trade with the plaintiff's trade ship.[5]

An early example of this tort can be found in the eighteenth-century case of Tarleton v. M'Gawley, where the defendant was held liable for unlawfully interfering with a third party attempting to trade with a competitor.[5]

Despite its long standing in the common law, the tort remained relatively unsettled in Canada until the Supreme Court of Canada (SCC) provided clarification in the landmark judgment A.I. Enterprises Ltd. v. Bram Enterprises Ltd.[2] Cromwell J, speaking for the Court, addressed many ambiguities surrounding the tort, such as the elements of the tort, what constitutes "unlawful means", and what level of intention is required.

The Court stated that there need not be a contractual relationship between the plaintiff and the third party nor does the defendant need to know about the existence of such a relationship for this tort to be made out.[6] All that is required is the use of unlawful means by the defendant with an intention to harm the plaintiff's economic interests.[6]

However, the defendant's intention to cause the plaintiff harm must be deliberate.[7] Cromwell J stated that this standard is higher than just realizing that incidental harm to the plaintiff is extremely likely to result, as incidental economic harm is an accepted part of market competition.[7]

Finally, the Court took a narrow definition of what constitutes "unlawful means" in the context of this tort, rejecting a broad interpretation that includes any activity against the law (such as criminal offences and statutory breaches).[8] Instead, only conduct that would give the third party a civil cause of action against the defendant (or would if the third party had suffered loss) will satisfy the "unlawful means" requirement.[9]

Importantly, this tort is not limited to situations where the plaintiff has no other cause of action against the defendant.[10]

More recently, in the 2023 Ultracuts v. Magicuts judgment, the Manitoba Court of Appeal clarified the essential elements of the unlawful means tort as follows:

Elements of the unlawful means tort[11][12]
1. [T]he defendant committed an unlawful act against a third party;
2. [T]he unlawful act caused economic harm to the plaintiff; and
3. [T]he defendant intended to cause economic harm to the plaintiff when committing the unlawful act.

Debate over the "unlawful means" element

In the news
Unlawful Means Action over Park Development in Regina
White truck parked on road with cement mixer. Employee in safety vest on sidewalk with white 'sidewalk closed' sign and orange traffic cones blocking the road and sidewalk.
A Regina property development company is suing the provincial government of Saskatchewan for causing it loss by unlawful means after being forced to stop its development project in Wascana Park.[13] The company commenced developing a new building for the Canadian National Institute for the Blind (CNIB), but provincial government has since told the CNIB to relocate the project elsewhere.[13]

The "unlawful means" element has been subject to rigorous debate by common law courts and academic commentators.[14] The Supreme Court of Canada in Bram referred to this debate as "the most important question concerning this tort".[15][16] The current standard for the "unlawful means" element in Canada and the UK favours a narrow reading.[8][17] However, robust arguments have been made in favour of a more broad reading of the "unlawful means" requirement.[14][18]

Narrow interpretation

In Bram, Cromwell J identified two possible rationales for the tort: the first focusing on punishing the intention to inflict harm and the second focusing on extending a cause of action from the immediate victim to the plaintiff whom the defendant intended to harm.[19] In adopting a more narrow interpretation of the "unlawful means" element the Supreme Court of Canada accepted the "liability stretching" rationale and rejected the "intentional harm" rationale.[8][20] The Court rationalized its decision with reference to the common law's historical reluctance to adopt rules about fair market competition.[21]

The narrow interpretation adopted by the Court in Bram excludes liability for statutory breaches and criminal offences per se. Cromwell J expressed a reluctance to impose civil liability for criminal and regulatory offences.[22] The Court justified its position by explaining that many criminal or regulatory offences have a corresponding cause of action under the common law, and thus a narrow interpretation is principled and not unduly narrow.[22]

Broad interpretation

As discussed by Cromwell J in Bram, the broader alternative to the narrow standard would be capturing all unlawful acts intended to harm the plaintiff within the "unlawful means" element of the tort, not just those which give rise to civil liability.[19] The broader standard is supported by the "intentional harm" rationale and has garnered some support from scholars and judges.[14][23]

Lord Nicholls, dissenting in OBG v Allan, argued that the broader standard better captures the rationale of the tort – which is to punish deliberate and unlawful interference with another's economic relations.[24] Thus, he was of the opinion that any act in breach of the law, provided that it was intentionally carried out to injure the plaintiff, should be actionable.[24] Strong policy arguments have been made by scholars in support of shifting towards a broader standard, primarily that a broader standard offers better protection against excessive and malicious conduct within the market.[25]

Ultimately, the heart of the debate reflects an ideological tension between economic freedom and the common law's role in prescribing fair conduct within the market, with both sides offering compelling arguments.[14]

Discussion questions

  • Why should courts be reluctant to impose liability for intentionally harming someone’s economic interests when the underlying conduct is not unlawful?
  • Should a plaintiff be able to sue a defendant for committing an unlawful act against a third party that economically harms the plaintiff, in circumstances where the defendant’s conduct towards the third party is not actionable by that party?
  • Why may the Supreme Court of Canada in A.I. Enterprises Ltd. v. Bram Enterprises Ltd have been reluctant to adopt a broad interpretation of the "unlawful means" requirement? Should Canadian courts consider adopting a more broad standard?
  1. ↑ Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 37, citing A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 5.
  2. ↑ Jump up to: 2.0 2.1 Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 38, citing A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 2.
  3. ↑ Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 38, citing A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 22.
  4. ↑ Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 38, citing A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at paras 37, 45.
  5. ↑ Jump up to: 5.0 5.1 Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 38, citing Tarleton v. M'Gawley (1794), 170 ER 153.
  6. ↑ Jump up to: 6.0 6.1 Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 42, citing A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 93.
  7. ↑ Jump up to: 7.0 7.1 Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 44, citing A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 95.
  8. ↑ Jump up to: 8.0 8.1 8.2 Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 40, citing A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at paras 40, 42, 45.
  9. ↑ Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 40, citing A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 76.
  10. ↑ Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 40, citing A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at paras 82, 85.
  11. ↑ Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 47.
  12. ↑ Iacono, Vincent (2018). "All Unlawful Means? An Inquiry into the Scope of the Unlawful Means Tort". Dalhousie J of Legal Studies. 137: 138–139.
  13. ↑ Jump up to: 13.0 13.1 Coleman, Cory (09 Mar 2022). "CNIB looking for new space in Regina now that building project in Wascana Park likely over". CBC. Check date values in: |date= (help)
  14. ↑ Jump up to: 14.0 14.1 14.2 14.3 Iacono, Vincent (2018). "All Unlawful Means? An Inquiry into the Scope of the Unlawful Means Tort". Dalhousie J of Legal Studies. 137: 147-150.
  15. ↑ A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 25.
  16. ↑ Iacono, Vincent (2018). "All Unlawful Means? An Inquiry into the Scope of the Unlawful Means Tort". Dalhousie J of Legal Studies. 137: 148.
  17. ↑ A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 51, citing OBG Ltd. v. Allan, [2005] EWCA Civ 106 at para 49.
  18. ↑ OBG Ltd. v. Allan, [2005] EWCA Civ 106 at para 153.
  19. ↑ Jump up to: 19.0 19.1 A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 37.
  20. ↑ A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at paras 37–38.
  21. ↑ Ultracuts v. Magicuts, 2023 MBCA 71 (§10.4.1) at para 40, citing A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 31.
  22. ↑ Jump up to: 22.0 22.1 A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 45.
  23. ↑ A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 at para 40.
  24. ↑ Jump up to: 24.0 24.1 OBG Ltd. v. Allan, [2007] UKHL 21 at paras 150-155.
  25. ↑ Iacono, Vincent (2018). "All Unlawful Means? An Inquiry into the Scope of the Unlawful Means Tort". Dalhousie J of Legal Studies. 137: 154.
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