THE ECONOMIC TORTS

Arthur Sike LLB (Unza), LLM

(Turin), AHCZ
 DECEIT
• Deceit: Where a person makes
a)A statement of fact;
b)Which he knows to be false, or on the truth of which
he has no genuine belief;
c)Intending that another shall act upon it;
d)Which he does;
e)To his detriment
The person making it will be liable to that other in
an action for deceit!
 DECEIT CONTINUED
• POINTS TO NOTE IN THE DEFINITION:
• The statement need not have been made to the
Plaintiff himself. See the case of LANGRIDGE V.
LEVY 91837] 2 M. & W. 519. The Defendant had
falsely represented to the Plaintiff’s father when
selling him a gun that it was of good make and safe.
It burst in the Plaintiff’s hand. It was held that the
Defendant was liable for deceit.
 DECEIT CONTINUED
• Statements of intention and opinion and promises may be
statements of fact for this purpose- ‘the statement of
man’s mind is as much a fact as the state of his digestion-
as echoed in the case of EDINGTON V.
FITZMAURICE [1885] 29 CHD. 459….per Lord
Bowen L.J. In this case company directors were held
liable for deceit because in a prospectus for debentures
they stated that the money was required for capital
purposes whereas in fact they intended to use it to pay off
pressing creditors. …..
• And so might a statement of law, e.g. if a Lawyer
fraudulently told a lay client “such is the law” well
knowing it not to be so!
 DECEIT CONTINUED
• Mere negligence in finding out the true facts is not
deceit: the case of DERRY V. PEEK [1889] 14
APP. CASE. 337. It was stated in a prospectus that
the company had the right to use steam for trams. In
fact, the Board of Trade consent was required and
this was quiet unexpectedly refused. It was held that
an action for fraud could not be maintained against
the directors since they believed the statement,
though they may have been negligent.
 DECEIT CONTINUED
• An intention to injure or defraud is not essential.
• Persons who are injured by false statement but were not
within the contemplation of the defendant cannot recover.
• See the respective cases below for each pint above:
• See EDGINGTON V. FITZMAURICE ; and
• PEEK V. GURNEY [1873] L.R. 6 HL 377- In this case,
the Plaintiff purchased shares in the market in reliance on
false statement in the prospectus. It was held he had no
action since the Prospectus was addressed to possible
applicants for new shares.
 DECEIT CONTINUED
• The Plaintiff must have substantially relied on the
misrepresentation, and must have sustained damage by so
doing!
• “Detriment” includes personal injuries. The fact that the
Defendant had nothing to gain by making the statement is
irrelevant.
• See the respective case:
• BURROWS V. RHODES [1899] 1 Q.B. 816. The
Defendants induced the Plaintiff to take part in the
Jameson Raid by the false statements that British women
and children needed protection. He recovered damages
for loss of property and personal injuries (loss of leg)
 MALICIOUS FALSEHOOD
Intentionally a false statement made to cause damage to
another. In contrast to defamation, malicious falsehood is
confined to damage to a person's business reputation. Also
called injurious falsehood or trade libel.
•Malicious falsehood or injurious falsehood is a tort. It is
a lie that was uttered with malice, that is, the utterer knew it
was false or would cause damage or harm.
•Malicious falsehood is a false statement made maliciously
that causes damage to the claimant. Malicious in this case
means the defendant either knew the statement was not true
or did not take proper care to check. It is often covered
under laws regarding defamation.
 MALICIOUS FALSEHOOD
• Malicious falsehood is a similar type of claim to defamation. A malicious
falsehood is a false statement published maliciously by the defendant
which either causes or is likely to cause financial loss to the claimant.
"Malicious" means, essentially, that the defendant either knew that the
statement was false or did not care as to its truth. Malicious falsehood
therefore has a number of disadvantages over defamation for a claimant.
Unlike defamation, a claimant must prove malice, falsehood and actual or
likely financial loss.
• The only advantage of malicious falsehood is that it can apply to any
statement whereas in defamation the statement must be defamatory in
nature. This is the one area in which it would be advisable to consider a
malicious falsehood action in place of defamation. There may be many
statements which can cause financial loss but which are not defamatory.
For example, to falsely say of a solicitor that he has retired, cannot be
defamatory but could be very damaging, resulting in loss of earnings. If
the solicitor could show that the statement was made maliciously, he could
bring an action for malicious falsehood
 MALICIOUS FALSEHOOD
• Malicious Falsehood

To be successful in a claim for malicious

falsehood the claimant must prove that:

1.The defendant published words about the

claimant which were false;
2. They were published maliciously; and
3. The publication has caused special damage
 PASSING OFF
• To deceive the public into believing that one’s goods or
services are those of another is actionable at the instance
of the latter. Examples are: using a similar trading name,
wrapping, identification mark, or description of goods.
See the case of WHITE HUDSON & CO. LIMITED
V. ASIAN ORGANISATION LIMITED [1964] 1
W.L.R. 1466- The Plaintiffs sold cough sweets in
Singapore in red wrappers. The Defendants began to sell
cough sweets in similar wrappers under a different name.
the majority of purchasers could not read and asked for
“red paper cough sweets”. An injunction was granted.
PASSING OFF CONTINUED
• The test is whether the representation by the Defendant of his
goods is calculated to deceive the public. The fact that he is
innocent of any intent to deceive is immaterial.
• In the case of common words the Plaintiff has a heavy burden
of proof in showing that the word has become associated with
his goods. But it may not be necessary to show that the word
is exclusively associated with them. See the case of
BOLLINGER V. COSTA BRAVA WINE CO. LIMITED
[1960] CH 262. The Defendants, producers of sparkling wine
made in Spain, sold it as “Spanish Champagne.” it was held
that the description of ‘Champagne” referred exclusively to
wines grown in the Champagne districts of France and the
Defendants were consequently guilty of Passing Off.
INTERFERENCE WITH TRADE: CONSPIRACY,
INTIMIDATION, INDUCING A BREACH OF
CONTRACT
• INTERFERENCE WITH TRADE IN THE LIGHT OF INDUCING A
BREACH OF CONTRACT:
 If a third party (A) internationally and without lawful justification induces
B to break his contract with C, C has a right of action against A for the
damage which he suffers thereby.
 The third party must either intend to bring about a breach or be recklessly
indifferent as to whether there will be a breach or not see the case of
EMERALD CONSTRUCTION CO. LIMITED V. LOWTHIAN
[1966] 1 W.L.R 691: Union officials took action to hamper the work of
sub-contractors and thus induce the main contractors to terminate their
contract. They did not know the terms of the contract but were indifferent
as to whether such termination would be lawful or unlawful. An injunction
was granted to restrain them.
INTERFERENCE WITH TRADE IN THE LIGHT
OF INDUCING A BREACH OF CONTRACT
• FORM OF INTEFERENCE:
• (i) Direct Persuasion: LUMLEY V. GYE [1853] 2 E. &
BL. 216: The Plaintiff, an opera-house manager, entered into a
contract with a singer for her exclusive services over a period.
The Defendant induced her to break it and was held liable.
• (ii) Direct intervention whereby it becomes impossible for
the contract to be performed. See the case of G.W.K.
LIMITED V. DUNLOP RUBBER CO. LIMITED [1926]
T.L.R. 376: Before a motor show the Defendants secretly
substituted there tyres for the tyres of another company whose
tyres were, by contract with a motor manufacturer, always to
be exhibited on the latter’s car. It was held they were liable for
interference with the contract.
INTERFERENCE WITH TRADE IN THE LIGHT
OF INDUCING A BREACH OF CONTRACT
• Note also that the intentional use of unlawful means
by A against B which precludes him from entering
into a contract with C will give C a right of action
against A. See: TARLETON V. MCGAWLEY: In
order to prevent the Plaintiff trading with natives in
Africa, the Defendant, a rival trader, fired a cannon at
a native canoe. It was held that the Defendant was
liable for the damage thereby suffered by the Plaintiff
INTERFERENCE WITH TRADE IN THE LIGHT
OF INDUCING A BREACH OF CONTRACT
• DEFENCE:
• There will be lawful justification if, e.g., the Defendant
acts in the interests of public morality or is under a moral
duty to give advice. But the mere absence of malice or
furtherance of the Defendant’s own interests is not a
defence. See: CAMDEN NOMINEES V. FORCEY
[1940] CH. 352: A Tenant Committee in a block of flats
induced other tenants to refrain from paying their rent in
order to bring pressure to bear on the Landlords to
remedy grievances. It was held that its members were
liable to the Landlords. Neither common interest nor the
tenants weakness vis-à-vis the Landlords was sufficient
justification!
 INTERFERENCE WITH TRADE IN
THE LIGHT OF INTIMIDATION:
• The tort of intimidation is committed if A threatens to act
unlawfully against B with the intention of causing B to act to
the detriment of C: to understanding the foregoing at this
stage, let’ consider the case of ROOKES V. BARNARD
[1964] A.C. 1129: The Plaintiff was employed in the design
office of B.O.A.C. He had ceased to be a member of the A.
Union. In order to preserve 100 per cent. Union membership
in the design office of the defendants, officials of the union,
threatened to strike in breach of the their contracts of
employment unless the Plaintiff was dismissed. As a result the
Plaintiff's contract was lawfully terminated. It was held that
the Defendant’s had committed the tort of intimidation and the
Plaintiff could recover.
INTERFERENCE WITH TRADE IN
THE LIGHT OF INTIMIDATION:
• Therefore, if C suffers damage thereby, he will have
a right of action against A. it does not matter whether
B’s action in relation to C is lawful or unlawful.
• Note that it is not a tort to threaten a lawful act,
however, malicious the intention.
INTERFERENCE WITH TRADE IN
THE LIGHT OF CONSPIRACY:
• When two or more persons, without lawful justification,
combine for the purpose of willfully causing damage to the
Plaintiff, and actual damage results therefrom, they commit
the tort of conspiracy.
• CROFTER HAND WOVEN HARRIS TWEED CO.
LIMITED V. VEITCH [1942] A.C. 435: Trade union
officials, for the purpose of raising wages on the island of
Lewis, persuaded the Dockers not to handle mainland wool
which, it was alleged, was undercutting that spun on the
island. The Dockers (without breaking any contract) complied.
It was held that the union officials were not liable in
conspiracy for the damage caused to the mills using mainland
wool, since their purpose was to benefit members of their
union.
 END!
• QUESTIONS/Additions/ clarifications
• arthsike@yahoo.com/ sikea@zra.org.zm