Torquay Hotel Co Ltd v Cousins

At common law, deliberate and direct interference with the execution of a contract is actionable even where the contracting party would not itself be liable for breach. The interference must be intentional, with knowledge, or wilful blindness, of the contract, and direct. Indirect interference is actionable only where unlawful means are used. Statutory protection for industrial action depends on a genuine trade dispute and conduct in its furtherance. A trade union may be immune from an action in tort, including an injunction, but its officials are not thereby protected. A quia timet injunction may restrain threatened interference where the evidence sufficiently manifests an intention to prevent existing or anticipated contractual supplies.

The plaintiff hotel relied on regular fuel-oil deliveries from Esso and sought interlocutory relief after officials of the defendant union announced that supplies would be stopped and threatened a supplier of alternative fuel. The union claimed that its conduct was protected as action in furtherance of a trade dispute arising from a recognition dispute at another hotel.

Mr Justice Stamp granted an injunction pending trial. The Court of Appeal considered whether there was a trade dispute with the plaintiff, whether the force majeure clause in the Esso contract affected liability, whether the threatened conduct constituted direct interference with contractual performance, and whether the union itself could be restrained under section 4 of the Trade Union Act 1906.

The Master of the Rolls gave the leading judgment. Lord Justice Russell agreed that the individual officials should remain restrained and that the union itself was protected from the injunction. Lord Justice Winn agreed in the result, while expressing some separate reservations about the wider scope of the statutory trade-dispute provisions.

1. Trade dispute. The recognition dispute at the Torbay Hotel was a trade dispute: see Beetham v Trinidad Cement Ltd [1960] AC 132. There was no trade dispute with the Imperial Hotel, which employed no members of the union and had no dispute concerning wages, conditions or recognition. The action against it was intended to punish the managing director for his reported views and was not in furtherance of the Torbay dispute. The protections in sections 1, 2 and 3 of the Trade Disputes Act 1906 were therefore unavailable.
2. Contractual performance. The force majeure clause might excuse Esso from damages, and possibly mean that Esso was not itself liable for breach, but it did not protect third parties who unlawfully prevented or hindered performance. The principle in Lumley v Gye [1853] 3 El & Bl 216 extended to deliberate prevention of performance without breach. A party could not rely on an excuse which it had itself caused.
3. Direct interference. The relevant inquiry required interference with execution of a contract, deliberate conduct with knowledge or wilful blindness as to the contract and an intention to interfere, and direct interference. The officials' telephone messages to Esso and Alternative Fuels were direct and showed the necessary intention.
4. Injunction and disposition. The evidence justified a quia timet injunction, notwithstanding that no delivery had ultimately been stopped. Section 4 of the Trade Union Act 1906 barred an action against the union in respect of a tortious act, including an injunction, so the union was struck out. The injunction remained against the individual defendants, including Mr Cousins. The order was varied accordingly. Leave to appeal to the House of Lords was refused, and three-quarters of the appeal costs were payable by the appellants other than the union.

1. Court of Appeal: Varied the interlocutory order by removing the trade union from the injunction, while maintaining the injunction against the individual defendants. Leave to appeal was refused.
2. High Court: Mr Justice Stamp granted an interlocutory injunction on 23 May 1968 pending trial.