Domestic & General Group Limited & Ors v Premier Protect Holdings Limited & Ors

Agents acting for a business may incur liability for fraudulent misrepresentations made within the scope of their actual or ostensible authority, even where the principal did not expressly authorise the precise fraud. The tort of causing loss by unlawful means requires an intention to cause loss, unlawful means against a third party, and interference with that third party’s freedom to deal with the claimant. The freedom need only be impaired; it need not be completely overborne. A defendant intending to obtain business may possess the necessary intention where the claimant’s loss is the inevitable or intended means of securing that gain. Substantial adverse inferences may be drawn from serious disclosure failures and false evidence, although such inferences must be approached carefully.

The claimants, providers of home-appliance protection plans, alleged that the defendant traders and their controllers used cold-callers to make fraudulent misrepresentations suggesting association with the claimants. Customers were induced to buy competing plans and, in many cases, to cancel or not renew the claimants’ plans.

The trial concerned liability for causing loss by unlawful means and unlawful-means conspiracy, agency authority, intention, continuation of the business through a successor company, alleged breaches of an interim injunction, and injunctive relief. The central issues were whether the representations were fraudulent, whether they were made within the traders’ actual or ostensible authority, whether the defendants intended to cause loss, and whether the customers’ freedom to deal with the claimants had been interfered with.

1. Liability and disposition. The principal defendants committed the torts of causing loss by unlawful means and conspiracy to use unlawful means. Mr Khan did not commit either tort. The question of final injunctive relief was left for further consideration after the parties had considered the judgment.
2. The defendant traders’ callers regularly made an association misrepresentation, often supported by representations about expiry, cancellation, payment details or discounts. The expiry and cancellation representations were regularly or occasionally made, respectively. Renewal and price representations were not, in themselves, misrepresentations.
3. The association misrepresentations were within the callers’ ostensible authority. Following Ivy Technology Limited v Martin [2022] EWHC 1218 (Comm) and Clearcourse Partnership Acquireco Limited v Jethwa [2023] EWHC 1218 (Comm), it was unnecessary to prove authority to make the specific fraudulent representation or to commit fraud. Authority to act in a way involving representations of that kind was sufficient.
4. The court inferred actual authority against Premier Protect, Home Protect, Apex Assure and UKSP. The relevant controllers knew of, encouraged or endorsed the deceptive sales practice. The inferences were supported by the business relationships, continuation of the businesses, conduct of the litigation, failures of disclosure and false evidence.
5. Applying OBG Limited v Allan [2008] 1 AC 1, intention to cause loss was established. The defendants intended to win the claimants’ customers and either appreciated that substantial loss was inevitable or intended customers to cancel the claimants’ plans where necessary to secure the competing business. It was unnecessary to prove the intention of every individual caller.
6. The unlawful means were fraudulent misrepresentations inducing customers to take out competing plans. The customers’ freedom to deal with the claimants was interfered with where deception impaired their decisions to cancel direct debits or plans. That freedom need not have been completely overborne. The interference could remain effective where customers cancelled after discovering the deception, because their decision was influenced by the competing plan already purchased.
7. UKSP was established to continue the business and operations previously conducted by Premier Protect and Apex Assure. The evidence included common premises, employees, payroll arrangements, business materials, call centres and sales practices.