Perma-Soil UK Ltd v Williams & Anor

The tort of misfeasance in public office requires an exercise of public power, unlawfulness, the requisite bad faith or mental state, and actual loss caused by the conduct.

Targeted malice requires a specific intention to injure. The alternative form requires knowledge, or subjective recklessness, that the officer is acting unlawfully and that the claimant will probably suffer harm. An improper motive or conflict of interest alone is insufficient. A damages claim also fails where the claimant cannot show that the allegedly improper conduct caused loss that would not have occurred following a lawful exercise of the power.

The claimant manufactured and supplied Perma-soil, a soil stabiliser used in highway reinstatement. The first defendant, a Council street works officer seconded to an infrastructure project, had assisted in discussions concerning a competing product manufactured by SM Recycled Ltd. The claimant alleged that he misused public powers by assisting the competitor and by causing or influencing approval of its product.

The Council accepted vicarious liability if the first defendant was liable, but both defendants denied misfeasance. The central issues were whether the first defendant had exercised a public power, whether he acted with targeted malice or for personal gain while knowingly or recklessly acting unlawfully, and whether his conduct caused actionable loss.

1. Claim dismissed. The claimant failed to establish any form of misfeasance in public office.
2. The applicable requirements were an exercise of public power, unlawfulness, the necessary mental element, and actual damage caused by the conduct. The first defendant’s advice that the competing product was substantially similar to Perma-soil was within the scope of his public functions and amounted to an exercise of public power.
3. The targeted-malice form was not established. The evidence did not show that the first defendant acted with the specific intention of injuring the claimant.
4. The alternative case was also not established. The claimant failed to prove that the first defendant acted for personal financial gain, or that he knew or was recklessly indifferent to the unlawfulness of his conduct and the probable resulting harm. A conflict between private interests and public duty did not itself establish unlawful exercise of power or bad faith.
5. The Council had power to approve another suitable soil stabiliser. The claimant had no right to remain the sole supplier and did not show that lawful approval of the competing product could not have been given. Consequently, any diversion of business was not loss caused by misfeasance.
6. The claimant’s further loss claims were untenable. Sole-supplier status was not a property right, no agreed Appendix 9 trial had been initiated for Perma-soil, and the claims concerning other customers and reputation lacked a sufficient evidential and legal basis.

The claim was dismissed. Quantum therefore did not fall for determination.