Pepe's Piri Piri Ltd & Anor v Junaid & Ors

The tort of conspiracy to injure by unlawful means requires a combination, unlawful means, an intention to injure and loss caused by the unlawful means. Foresight of loss is insufficient, although intention may be established where the defendant’s gain and the claimant’s loss are inseparably linked.

Unlawful interference with business requires an unlawful act against a third party which is independently actionable by that third party and which interferes with the third party’s freedom to deal with the claimant. Procuring breach of contract instead requires knowledge of the contract and an intention to interfere with its performance; an intention to injure is unnecessary. Deliberate indifference to whether conduct breaches the contract may amount to knowledge.

The claim arose from the closure of a Pepe’s Piri Piri franchise in Northampton and the subsequent opening of a Rio’s Piri Piri franchise at the same premises. The claimants alleged that the defendants conspired to injure their business, unlawfully interfered with it, and procured breaches of the franchise agreement between the claimants and Food Trends Limited.

Food Trends had surrendered its lease of the premises, and a new company controlled by some defendants had taken a new lease. The central issues were whether the defendants intended to injure the claimants, whether their conduct constituted unlawful means for the purposes of unlawful interference, and whether they had procured breaches of the franchise agreement.

1. The claims for conspiracy to injure by unlawful means and unlawful interference failed. The evidence did not establish an intention to injure the claimants. The defendants’ initial intention was to continue the Pepe’s franchise through a new company, rather than replace it with a Rio’s franchise.

2. The issue whether breach of contract can constitute unlawful means in the tort of conspiracy was left undecided because it was unnecessary to the result.

3. The unlawful-interference claim also failed because the defendants’ acts were not unlawful as against Food Trends. Inducing Food Trends to breach its contract might be unlawful as against the claimants, but it did not satisfy the separate requirement that the unlawful act be actionable by the third party.

4. The claim for procuring breach of contract succeeded against Mr Junaid, Mr Razi, Mr Hasib, Mr Adib, Optimum Services Intelligence Limited and Optifoods GSN Limited. Food Trends had breached clause 6.1.5 by surrendering the lease, since contractual disposition included surrender and the surrender was not made to a buyer of the business. The surrender also constituted a limited breach of clause 6.3.22 and caused the relevant management-fee consequences.

5. The defendants knew of the franchise agreement, or were deliberately indifferent to its terms, and intended that Food Trends surrender the lease. Their expectation that a new franchise agreement would later be negotiated did not prevent liability. Justification was unavailable.

6. Damages were limited to £2,523.07 for management fees due up to termination. Claims for future fees, a second Northampton store, marketing expenditure, litigation-support consultancy fees and management time were rejected.