Romantiek BVBA v Simms & Ors

A public officer does not commit misfeasance merely by using a lawful statutory power to prevent unlawful trading. Preventing illegal conduct will ordinarily be inconsistent with bad faith or an improper purpose, even if the intervention causes economic loss. In any event, damages cannot be recovered for losses arising exclusively from the prevention of illegal activity. The same limitation applies to unlawful interference with trade, which requires unlawful means. A Traffic Commissioner may investigate the good repute of licensed operators and warn them that dealings with an unlawful operator may affect that requirement.

The claimant, a Belgian road-haulage company, claimed damages against a Traffic Commissioner, his compliance manager and the Department for alleged misfeasance in public office, unlawful interference with trade and breaches of European Community law. The claims arose from letters sent to companies trading with the claimant, warning that their good repute might be affected by dealings with an operator whose UK haulage activities were considered unlawful cabotage.

The hearing was confined to liability, although causation and recoverable loss were also considered. The central issues were whether the defendants acted unlawfully or in bad faith, and whether the claimant could recover losses based on continuation of unlawful trading.

1. Claim dismissed. The claimant failed to prove misfeasance in public office or unlawful interference with trade against either defendant. Any alleged torts would not, in any event, have caused recoverable economic loss.
2. Misfeasance requires unlawful conduct by a public officer acting in the exercise of public functions, together with the requisite bad faith or improper purpose, knowledge or recklessness concerning unlawfulness, probable injury, and causation. The tort may arise from a deliberate omission, but not from mere inadvertence or oversight. The principles stated in Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 were adopted.
3. The First Defendant’s purpose was to prevent the claimant’s unlawful UK trading. The letters were within the statutory power to keep the good repute of licensed operators under review. That purpose was not targeted malice or bad faith. The Second Defendant acted on lawful instructions and there was no evidence of bad faith on his part.
4. Even if liability had been established, the claimant could not recover losses arising exclusively from the prevention of illegal trading. The principle in Hewison v Meridian Shipping Services PTE Ltd [2003] ICR 766 applied. The claimant could not show that it would have operated a profitable and lawful cabotage business.
5. Unlawful interference with trade requires unlawful means used with the object and effect of causing damage. The necessary unlawfulness was absent. The same rule concerning losses from illegal trading applied.
6. The absence of a prior warning did not make the letters unlawful. The claimant’s activities had continued for a lengthy period and the First Defendant was entitled to conclude that a warning would have no material effect.