Dear Colleagues:

Those of you interested in the economic torts might be interested in the New Brunswick Court of Appeal's decision in SAR Petroleum Inc. v. Peace Hills Trust Co. 2010 NBCA 22. In that case, the court decided that the defence of justification and the test of intention had largely become merged:

[55] In brief, if the breach of contract were neither an end in itself nor a means to an end, one must conclude that it was unintended. Hence, if the defendant did not act out of malice or obtain an economic advantage as a result of the breach, it should follow that the requisite intention is absent and the tort action must fail. Lord Hoffman cites one case which illustrates clearly the proper application of the test for intention. The case is Millar v. Bassey ... . No doubt Shirley Bassey's breach of her contract with the recording company had the foreseeable consequence that the recording company would breach its contracts with the accompanying musicians. In short, she knew or was deemed to have known of the contracts with the accompanying musicians. But as Lord Hoffman observed, breaches of those contracts was neither an end desired by Ms. Bassey nor a means of achieving that end. More pointedly, Ms. Bassey did not seek to achieve a benefit or advantage that would have otherwise accrued to the musicians but for her breach. She simply decided to withdraw from her contract and suffer the legal fate of any contract breaker: to pay damages. ...

[57] It has not escaped my attention that Lord Hoffman's formulation of the intention test may be recast as a test to determine whether the defendant acted for an improper purpose (maliciously or opportunistically). The flip side of the coin is to ask whether the defendant acted for a proper purpose. As stated earlier, it should follow that if the defendant did not act for improper purpose it must have acted for a proper one. If we take the test of intention to be whether the desired breach was a means to an end or an end in itself, and we leave aside cases of malice, we are left with deciding whether the defendant sought a commercial or economic advantage that crossed the
Rubicon from acceptable commercial behaviour to unacceptable or opportunistic behaviour. If the defendant did not cross the Rubicon, it is because he or she acted for what the law considers a proper purpose. Of course, the more difficult task is to reach an accord with respect to what qualifies as a proper, as opposed to an improper, purpose. Fortunately, for purposes of deciding this appeal, it can be safely assumed that it is proper for a defendant to pursue a course of action consonant with protecting its legitimate and existing contractual or proprietary rights with the third party.

[73] It seems to me [on the basis of [57]] that the defence of justification, as applied in Edwin Hill, has been incorporated into the test of intention as articulated in OBG Limited v. Allan. ... I must confess, however, that I have not been able to isolate a case in which the defendant was held to have acted for an improper purpose (maliciously or opportunistically) and yet was able to avoid liability by invoking the justification defence. Perhaps this explains why Lord Hoffman made no mention of the defence in his reasons for judgment.

 I am somewhat attracted to the reasoning in [55] (if only because I never understood what Lord Hoffmann meant when he said that the musicians breach was not a means to Ms. Bassey's end, on this analysis it was not a means to the end of procuring the musicians contractual benefit) but think the rest leaves much to be desired.  Any comments welcome.

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Jason Neyers
Associate Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435