Lewis v Yeeles

Liability for procuring a breach of contract requires an act which precedes the breach and has a causal connection with it. Knowledge of the contract need not extend to every term or to the precise identity of the contracting parties, provided the defendant knows that a contract exists and intentionally participates in conduct causing its breach. Advice about contractual matters is not, by itself, procurement. Liability arises where the defendant goes further and persuades the contracting party to adopt the breach. A director is generally personally liable for a tort committed by him, even when acting as the company’s agent and even if the company is also liable.

Miss Jennifer Yeeles succeeded in the Chancery Division against Mr Lenn Mayhew Lewis for procuring Mr Simon Benton’s breach of a contract concerning the transfer of a flat at 74 Seal Road, Sevenoaks. The deputy judge, Mr Bernard Livesey QC, held Mr Lewis liable in damages and ordered payment jointly and severally with Mr Benton: [2009] EWHC 1259 Ch.

Mr Lewis appealed on four grounds: the procurement occurred after Mr Benton had decided to breach; he lacked sufficient knowledge of the contract; his conduct was merely the provision of advice; and he acted only as a director of Strand Corporation Limited. The central issue was whether the deputy judge had correctly applied the established principles of procuring a breach to the facts found.

The Court of Appeal unanimously dismissed the appeal. The deputy judge’s findings of fact were unappealed and supported the conclusion that Mr Lewis was liable.

1. Timing and causation. Liability for procuring a breach requires an act by the defendant before the breach and a causal connection with it. The relevant conduct was not confined to Mr Lewis’s letter of 26 May 2004. The deputy judge found that, during the first week of May, Mr Lewis persuaded Mr Benton to take a tougher line, abandon the solicitor acting in connection with the Seal Road purchase, and seek advice from Mr Lewis’s own solicitors. That involvement caused Mr Benton to decide to refuse the transfer and continued through the breach.
2. Knowledge. The requirement of intentional causative participation, identified in OBG Ltd v Allan [2008] 1 AC 1, was satisfied. Mr Lewis knew that a contract existed and that the money contributed to the purchase formed part of a contractual joint venture. It was unnecessary for him to know every contractual term or whether the contracting party was GT Building and Contractors Limited or Miss Yeeles.
3. Advice and persuasion. Mere advice about contractual matters does not amount to procurement: DC Thomson & Co Ltd v Deakin [1952] Ch 646 at 686. But the facts showed conduct going beyond arranging legal advice. Mr Lewis persuaded Mr Benton that he needed to take a tougher line, thereby entering the field of persuasion and procurement.
4. Personal liability. The submission based on Mr Lewis’s directorship was rejected. The issue was distinct from personal assumption of responsibility in negligent misstatement, discussed in Williams v Natural Life Health Foods Limited [1998] 1 WLR 830 at 835–836. Procuring a breach is a tort, and an individual tortfeasor is generally personally liable for his own torts notwithstanding that he acted as the company’s agent and that the company may also be liable.

• Court of Appeal (Civil Division): Appeal dismissed. The court upheld the order made by the Chancery Division on 8 June 2009.
• High Court, Chancery Division: Mr Bernard Livesey QC, sitting as a deputy judge, upheld the claim for procuring a breach of contract and awarded damages, reported at [2009] EWHC 1259 Ch.