Inshore Services (International) Ltd v NFFO Services Ltd & Anor

The tort of interference with business by unlawful means is committed where a defendant threatens conduct intended to harm the claimant’s business, and the threatened means are unlawful. The defendant’s state of mind may be established by showing recklessness or indifference as to whether the threatened conduct will breach the law. A threat need not specify every unlawful act contemplated, provided the surrounding evidence reasonably establishes its nature. Voluntary non-co-operation is not itself unlawful, but threatened conduct involving breaches of maritime collision rules or the duty of good seamanship may constitute unlawful means.

Inshore claimed damages after Horizon Exploration Ltd replaced its intended support vessel with a local fishing vessel following a letter from NFFO Services. The letter conveyed Fleetwood fishermen’s threat not to co-operate with Horizon’s seismic survey unless local vessels were used. The trial judge rejected claims for inducing breach of contract and found no liability against the second defendant, but held NFFO Services liable for interference with Inshore’s business by unlawful means intended to injure.

NFFO Services appealed, contending that the evidence did not justify attributing contemplated unlawful conduct, or the necessary state of mind, to Mr Bevan and the company. The central issue was whether the letter threatened unlawful means and whether the trial judge was entitled to find the requisite intention or recklessness.

1. Appeal dismissed. The trial judge’s order that NFFO Services pay damages to Inshore, with damages to be assessed, was upheld. Costs were ordered, including £25,000 payable within 14 days, with the remainder subject to detailed assessment.
2. The court accepted the common-ground principle, stated in Associated British Ports v TGWU [1989] 1 WLR 939, that interference with another’s trade or business with the intention of harming him by unlawful means is tortious. The same principle applies where the threatened unlawful means do not involve procuring breach of an existing contract.
3. Following Emerald Construction Co Ltd v Lowthian [1966] 1 WLR 691, the court held that recklessness is sufficient. A defendant who is indifferent whether the threatened conduct will be lawful or unlawful may possess the necessary intention. The court described Mr Bevan’s position, at the least, as turning a blind eye to the threatened unlawful conduct.
4. The fishermen had no legal duty to provide voluntary co-operation, and spiteful interference alone would not establish unlawful means. However, the evidence entitled the judge to find that the threatened conduct included maintaining station, ignoring communications, and otherwise acting in breach of the Merchant Shipping (Distress Signals and Collision Regulations) Order 1996 and good seamanship duties.
5. The judge was entitled to draw the necessary inference from the evidence, including Mr Bevan’s cross-examination and the surrounding circumstances. It was unnecessary for every prospective unlawful act to be expressly identified in the threat. The court also observed that modern case preparation need not return to the costly practice of exhaustive particulars; information may often be supplied informally, as explained in McPhilemy v Times Newspapers Ltd [1999] 3 All ER 775.

• Court of Appeal (Civil Division) [2001] EWCA Civ 1722: dismissed NFFO Services’ appeal and upheld liability for interference with Inshore’s business by unlawful means.
• Queen’s Bench Division: Mr Michel Kallipetis QC, sitting as a deputy High Court judge, dismissed the contractual interference claims and the claim against the second defendant, but awarded Inshore damages against NFFO Services.