ED&F Man Sugar Ltd v T&L Sugars Ltd & Ors

Inconsistent assertions in separate proceedings against different parties do not, without an identified legal principle, prevent a party advancing its pleaded case. An unlawful-means conspiracy involving alleged deception requires specific pleaded facts showing relevant knowledge, intention and participation. A claim for inducing breach of contract requires an identified contractual breach. At the interlocutory stage, a claim should not be dismissed where a pleaded issue requires evidence and is not bound to fail.

The claimant sought damages arising from a shipment of raw sugar delivered to the first defendant’s refinery after the buyer failed to pay. It pleaded unlawful-means conspiracy, inducing breach of contract and conversion. The defendants applied to strike out or obtain summary judgment on the conversion claim, the conspiracy claim, the inducing-breach claim, and the conspiracy claim against two individual directors.

The central issues were whether positions taken in arbitration prevented the claimant asserting retained title, whether the conspiracy allegations had a realistic prospect of success and adequate particulars, whether the buyer’s sub-sale constituted a breach of the sale contract, and whether the individual defendants’ alleged participation was sufficiently pleaded.

1. Conversion. The objection was rejected. The defendants identified no legal principle preventing the claimant from asserting that title had not passed merely because it had advanced an inconsistent position in arbitration against the buyer. There was no issue estoppel between proceedings involving different parties. The claim had a real prospect of success.
2. Conspiracy. The alleged deception was weak but remained reasonably arguable. The possible influence of the email on the diversion decision and the existence of loss could not be resolved without evidence. The conspiracy claim was therefore not bound to fail. Silence could constitute unlawful means only where there was a duty to speak, which had not been pleaded.
3. Inducing breach. This claim was struck out. The pleaded breach was the buyer’s entry into a sub-sale agreement, but the sale contract contained no term prohibiting that agreement.
4. Individual defendants. Unlawful-means conspiracy is not generally equivalent to fraud, and dishonesty is not an essential element. However, allegations involving deception require fraud-level particularity. Mere common directorships and involvement in other discussions were insufficient. The claims against the individual defendants were struck out except insofar as they concerned the bringing of the Italian proceedings.