Cardinal Packaging Ltd v Atkinson & Ors

The tort of procuring a breach of contract requires more than an act which contributes to the breach. The defendant must know of the contract, intend to procure its breach, and definitely persuade, induce or procure the breach. The breach must then occur as a necessary consequence.

Knowledge of the existence of a contractual notice provision is insufficient without an intention to bring about a breach. Ignorance of the precise contractual terms does not prevent liability where the defendant intended the contract to end by breach if it could not lawfully be ended. Conversely, liability does not arise where the defendant positively intended that no breach should occur.

The claimant appealed against the dismissal of its claim against the corporate defendants. Three employees had left the claimant’s employment and joined their former employer without giving the contractual notice required. The employees were held liable for breach of contract, but the claim that their former employer had procured the breaches failed.

The appeal challenged the trial judge’s findings about the managing director’s knowledge and intention. It also argued that the knowledge of different company officers should be combined and attributed to the corporate defendants. The central issue was whether the evidence established direct persuasion, procurement or inducement with an intention to bring about breaches of the employees’ contracts.

1. Appeal dismissed. The trial judge’s findings of fact, particularly his acceptance of Mr Whitehouse’s evidence, were entitled to respect. The Court of Appeal would not interfere with those findings merely because another inference was available.
2. The applicable law was stated in [1952] 1 Ch 646. The tort requires knowledge of the contract, an intention to procure its breach, definite persuasion, inducement or procurement, an actual breach, and a breach which ensues as a necessary consequence of the defendant’s conduct.
3. The principle stated by Diplock LJ in [1966] 1 WLR 691 applied. Ignorance of the precise contractual terms is not decisive where the defendant intended the contract to end by breach if there were no lawful means of ending it. On the facts, however, no officer of the corporate defendants was shown to know that the employees could not lawfully start work on 24 March 1997.
4. The standard employment letters specifying a start date did not establish pressure or an intention to procure breaches. The evidence showed that the employer was pleased to re-employ the men but had no particular urgency or incentive to secure their immediate return. The managing director believed that the notice problem had been resolved and had no intention to procure a breach.
5. The subsidiary argument that the knowledge of different officers could be aggregated did not arise on the findings. No individual officer knew that the contractual problem remained unresolved, and the Court therefore made no determination of any general rule on aggregation of corporate knowledge for this tort.

The rule in [1921] 1 Ch was consistent with the conclusion that an alleged inducer is not liable where there is a positive intention not to cause a breach. Lord Justice Aldous and Lord Justice Laws agreed with Lord Justice Henry. Order: appeal dismissed.

• Court of Appeal (Civil Division): Appeal from the decision of His Honour Judge Moseley QC, sitting as a Deputy High Court Judge in the Queen’s Bench Division at Cardiff District Registry on 22 October 1998. The claim against the corporate defendants had been dismissed.
• Court of Appeal (Civil Division): Appeal dismissed; the order concerning the corporate defendants was upheld.