HT-2021-000363 - [2025] EWHC 532 (TCC)

The tort of procuring a breach of contract requires: (i) a breach of contract; (ii) conduct to procure or induce that breach; (iii) knowledge or recklessness as to the existence of the relevant term in the contract; and (iv) intention that the conduct induced or procured would result in a breach of that term: OBG v Allan [2007] UKHL 21 per Lord Hoffmann at [39]-[44]; per Lord Nicholls at [172], [191]-[193] & [202].

The test was helpfully clarified by the Court of Appeal in Kawasaki Kisen Kaisha Ltd v James Kemball Ltd [2021] EWCA Civ 33 per Popplewell LJ at [20]-[21], citing with approval Global Resources Group v Mackay [2004] CSOH 149, 2009 SLT 104 at [11]-[14] per Lord Hodge: “A commits the delict or tort of inducing a breach of contract where B and C are contracting parties and A, knowing of the terms of their contract and without lawful justification induces B to break that contract.” The ingredients of the tort were identified as follows:

For the reasons set out in the technical breaches section of this judgment, I have found that Winsopia was in breach of the ICA. There is no defence of lawful justification. Therefore, the material questions in respect of each defendant are whether the necessary elements of (ii) inducement, (iii) knowledge and (iv) intent are established so as to give rise to liability.

The breach of contract must be induced by the defendant. Liability for procuring a breach is an accessory liability where the primary wrong is the breach of contract. Mere prevention of contractual performance will not found liability. There must be a sufficient causal connection between the defendant’s act of persuasion, encouragement or assistance and the breach of contract: OBG per Lord Hoffmann at [36]; Lord Nicholls at [178]-[180]; Kawasaki per Popplewell LJ at [32]-[33].

The defendant must know that his action will result in a breach of contract. It is not sufficient to show that the defendant knows that he is procuring an act which, as a matter of law or construction of the contract, amounts to a breach. The defendant must know the essential facts which make the act unlawful. Mere negligence or ignorance is not sufficient. However, recklessness or deliberate disregard of available knowledge, including turning a blind eye, is sufficient: OBG per Lord Hoffmann at [39]-[41]; Lord Nicholls at [191]-[192].

The issue whether a defendant’s state of mind was sufficient to establish relevant knowledge was considered recently in Lifestyle Equities CV v Ahmed [2024] UKSC 17 per Lord Leggatt (giving the judgment of the court) at [101] and [107]-[109]:

“[102] Liability for procuring a breach of contract does more than provide an analogy with liability for procuring another person to commit a tort. As Lord Hoffmann and Lord Nicholls (with whom the other law lords agreed on this issue) made clear in OBG Ltd v Allan, both forms of liability rest on the same underlying principle. This principle was stated in Lumley v Gye by Erle J, at p 232:

"It is clear that the procurement of the violation of a right is a cause of action in all instances where the violation is an actionable wrong ... he who procures the wrong is a joint wrongdoer, and may be sued, either alone or jointly with the agent, in the appropriate action for the wrong complained of."

Although in this statement Erle J did not use the word "malicious", it is clear from the context and from his judgment as a whole that - in common with all the members of the court - Erle J was concerned with cases where someone "maliciously" procures a wrong and that his statement of the law tacitly assumes that the defendant's act is "malicious". It is also apparent, as Lord Watson observed in Allen v Flood [1898] AC 1, 96, that the judges in Lumley v Gye regarded "malice" as "signifying in law, not that the defendant had been actuated by a bad motive, but that he had procured the commission of an act which he knew to be illegal." At the subsequent trial Lumley's claim in fact failed, as the jury found that Gye was not aware, when he engaged Wagner, that she had no right to terminate her contract with Lumley: see SM Waddams, "Johanna Wagner and the rival opera houses" (2001) 117 LQR 431, 455-456. Although as a matter of causation Gye had procured the commission of an act which was a breach of contract, he did not know that the act which he procured was a breach of contract. He therefore lacked the state of mind required for accessory liability.

…

[108] A further distinction needs to be drawn. In accordance with the principle that ignorance of the law is no excuse, liability cannot depend on whether the defendant knows that the act done by the primary wrongdoer is against the law. When courts refer to a requirement of knowledge that an act is wrongful, they must generally be taken to mean, not that knowledge of the law is required, but that the defendant must know the essential facts which make the act unlawful. The same applies to references to intention. Lord Templeman's reference to a defendant who "intends and procures ... that infringement shall take place" should be understood in this sense. Lord Templeman should not be taken to mean that the defendant must have a sufficient knowledge of copyright law to know that the act which he intends to bring about will be a breach of copyright; only that the defendant must know the facts which make that act a breach of copyright.

[109] Although in MCA Records Chadwick LJ adopted and relied on Lord Templeman's statement of principle quoted at para 106 above, he did not discuss what precisely the defendant must intend in order to be liable for procuring an infringement. It does not appear that any argument was specifically directed to this point. Chadwick LJ assumed that it was sufficient to make Mr Young liable for procuring infringements of copyright that "it was Mr Young's purpose and intent, in doing what he did, that the Chess recordings should be copied and marketed through [the company]": para 36 (and see also para 61). That, in my opinion, was incorrect. Applying the principle of accessory liability stated by Erle J in Lumley v Gye, it was not enough that Mr Young knew and intended that the relevant recordings should be copied and issued to the public. It was also necessary to establish that Mr Young knew (or deliberately turned a blind eye to) all the essential facts which made copying and marketing the recordings a breach of copyright. Those facts included the fact that the company controlled by Mr Young did not either own the copyright or have a licence from the owner to copy and issue copies to the public of the relevant recordings.”

Thus, the knowledge element of the tort is satisfied if the defendant was, or should have been, aware of the essential facts that amount to a breach of contract, including the material terms of the contract, even if he was not aware of the applicable rules and principles of law.

As to the mental element of the tort, the defendant must intend to bring about the breach of contract, either as an end in itself, or at least as the means to some further end. Mere causative participation is not enough: OBG per Lord Hoffmann at [42]; Lord Nicholls at [191]; Kawasaki per Popplewell LJ at [34].

In principle, it is open to a defendant to show that he did not have the requisite intention to cause economic harm by evidence of a firm belief, based on legal advice, that he was entitled to act as he did: Meretz Investments v ACP Ltd [2007] EWCH Civ 1303, per Arden LJ at [122]-[127].

Generally, in order to support such a defence, it would be incumbent on the defendant to disclose the relevant legal advice and adduce evidence that he relied on such advice: Digicel (St. Lucia) Limited v. Cable & Wireless Plc [2009] EWHC 1437 (Ch) per Morgan J at [25]; Generics (UK) Ltd v Competition and Markets Authority [2018] CAT 4 per Roth J at [200].

I now turn to consider the case of wrongful procurement against each defendant.