Scala Ballroom (Wolverhampton) Ltd v Ratcliffe

For the tort of conspiracy, the claimant must show an agreement, an unlawful purpose and resulting damage. A combination deliberately causing trade injury may nevertheless be lawful where its real and predominant purpose is to advance or protect the lawful interests of those combining. Those interests are not confined to interests measurable in money. They may include the protection of members’ welfare, working conditions and livelihood, provided the defendants honestly believe that the interests would suffer directly unless the action were taken. On an interlocutory injunction application, the court makes a provisional assessment and asks whether there is a reasonable probability that the claimant is entitled to relief. Where the evidence shows a prima facie lawful purpose, the injunction should be refused.

The proprietors of a ballroom appealed against the refusal of an injunction against officials of the Musicians’ Union. The officials had notified the proprietors that union members would not perform at the ballroom because the proprietors operated a policy excluding coloured people. The proprietors alleged conspiracy to injure their trade.

An earlier injunction restrained procurement of breaches of existing performance contracts. The remaining application was refused by Diplock J. The central issue on appeal was whether the alleged combination had an unlawful purpose, apart from any protection potentially available under the Trade Disputes Act 1906.

1. Appeal dismissed with costs. The court held that no prima facie case had been made out for the injunction sought. The earlier order concerning existing contracts was not under appeal.
2. Following Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435, and the propositions stated in Sorrell v Smith [1925] A.C. 700, the relevant elements were an agreement between the defendants, an unlawful purpose and resulting damage. Proof of malevolence was unnecessary. The evidence provisionally supported agreement and likely trade injury, but not an unlawful purpose.
3. Lord Justice Hodson held that the lawful interests capable of protection are not limited to narrowly material or cash-measurable interests. The officials represented a union containing many coloured members and had evidence that racial exclusion adversely affected members’ professional relationships, standards and livelihood. They could therefore have a lawful interest in opposing the policy and securing labour conditions.
4. Lord Justice Morris agreed. He held that the defendants’ honest belief that opposing racial discrimination advanced the welfare of their members could amount to protection or promotion of a lawful interest, even without a demonstrable financial advantage. Lord Justice Sellers agreed with Lord Justice Hodson’s reasons.
5. The court made no determination on whether the Trade Disputes Act 1906 supplied a statutory defence. That issue remained open because it had not been argued. The decision was confined to whether, apart from that possible defence, the evidence established a prima facie entitlement to an injunction.

• Court of Appeal: The appeal from Diplock J’s refusal to grant the remaining injunction was dismissed with costs. A separate interim injunction restraining procurement of breaches of existing contracts had previously been granted by Havers J and was not appealed.