MANAGING THE LAW

(4TH EDITION)

Chapter 5: Miscellaneous Torts Affecting Business

 Chapter 5 Overview
conspiracy occupiers liability
intimidation nuisance
interference with the rule in Rylands vs
contractual relations Fletcher
unlawful interference defamation
with economic relations injurious falsehood
deceit

Managing the Law, 4e Copyright 2014 Pearson Canada Inc. Chapter 5-2
 Intentional Torts

Occur when a person intentionally acts in certain ways,

rather than merely acting careless
Meaning of intention differs depending on tort:
Chapter 4 torts require mere intention to act a certain way
Some torts require intention to harm plaintiff
Includes knowledge by tortfeasor that injury was reasonably
foreseeable
These torts are examined here in Chapter 5

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 Conspiracy

Definition
Two or more persons agree to act together with primary
purpose of causing plaintiff to suffer financial loss
Aggressive competition by an individual generally fine
Plaintiff must prove
If actions lawful, primary purpose was to hurt plaintiff
If actions unlawful, merely that defendants should have
known their actions may hurt plaintiff

Managing the Law, 4e Copyright 2014 Pearson Canada Inc. Chapter 5-4
 Intimidation

Definition
Loss results from threat to commit unlawful act
Plaintiff must prove
threat to break duty in tort, contract, or crime
intimidated party submitted to threat
Plaintiff need not prove defendant intended to cause
loss or damage

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 Intimidation

May involve two or three parties

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 Intimidation

Third Party Intimidation

Rookes v Bernard
The Defendant who was a labour inion was angry with
Rookes as a result of a labour dispute. They threated the
airline with a strike unless they fired Rookes. Rookes
successfully sued the Union under tort of intimidation.

Managing the Law, 4e Copyright 2014 Pearson Canada Inc. Chapter 5-7
 Interference with Contractual
Relations
Definition
disruption of contract between plaintiff and another
Risk management
danger in luring away competitors customers
danger in luring away competitors workers
Forms of interference with contractual relations
direct inducement to breach of contract
indirect inducement to breach of contract

Managing the Law, 4e Copyright 2014 Pearson Canada Inc. Chapter 5-8
 Direct Inducement to Breach
Contract
Directly cause breach with plaintiff
e.g., convince customer to break agreement, or employee
to quit job
Plaintiff must prove
defendant knew about contract
defendant intended to cause breach of contract
defendant actually caused breach of contract
plaintiff suffered loss

Lumley v Gye

Managing the Law, 4e Copyright 2014 Pearson Canada Inc. Chapter 5-9
 Indirect Inducement to Breach
Contract
Indirectly cause breach with plaintiff
eg prevent employees from going to work, or steal workers
tools to prevent performance
Plaintiff must prove
same factors as direct inducement
plus defendants actions were themselves unlawful

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 Unlawful Interference with
Economic Relations
Definition
unlawful act intended to cause economic loss to plaintiff
Newly emerging tort: Reach MD vs PMAC
Plaintiff must prove
intent to injure plaintiff (act directed toward plaintiff)
unlawful or illegal act (unauthorized action sufficient)
plaintiff suffered economic loss

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 Deceit
Definition
intentional known misleading statement made with intent
to mislead plaintiff which causes loss
Plaintiff must prove
defendant made false statement
includes half-truths, failure to update information, and silence when
defendant has duty to disclose
defendant knew statement was false or was reckless in
determining truth

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 Elements of Deceit
Plaintiff must prove (contd)
defendant intended to mislead plaintiff
plaintiff reasonably relied on statement
generally unreasonable to rely on puff, prediction, or opinion
plaintiff suffered loss
Risk management
To avoid liability, business people should not only avoid
lying, but also creating the wrong perception

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 Occupiers Liability

Definition
Requires an occupier of premises to protect visitors from
harm
Occupier: person with substantial control of premises
Premises: includes land, ships, trains, planes, elevators, etc
Visitor: any person who enters onto premises
Occupiers liability differs across jurisdictions

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 Occupiers Liability:
Traditional Common Law
Traditionally, occupiers obligation varied with type of visitor

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 Challenges with Traditional Rules

Categories are too broad

eg burglar and curious child both trespassers
Difficult to distinguish categories
eg uncertain economic gain: licensee or invitee?
Visitors status may change over time
eg unruly customer: from invitee to trespasser

Managing the Law, 4e Copyright 2014 Pearson Canada Inc. Chapter 5-16
 Occupiers Liability:
Modified Common Law
Variations between categories eliminated
duty of common humanity to all trespassers
specific duty formulated to reflect facts of case
licensee and invitee generally treated same
Some jurisdictions (Newfoundland and Labrador) require
occupiers to use reasonable care toward all lawful visitors

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 Occupiers Liability: Statutory Law

Six provinces enacted Occupier Liability legislation

Alberta, BC, Manitoba, Nova Scotia, Ontario and PEI
Another (New Brunswick) removed the tort of
Occupiers Liability, using tort of negligence instead

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 Statutory Changes to Occupiers
Liability
Duty applies to condition of premises and activities
Common law applied to condition only
Standard of care no longer related to type of visitor
General requirement to use reasonable care
Some exceptions for adult and other trespassers
Liability can be avoided by issuing warnings
Landlord now liable for failure to repair under lease
no duty at common law because not occupier

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 Nuisance

Definition
unreasonable interference with use and enjoyment of
plaintiff s land
Involves tensions between competing uses of land

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 Forms of Nuisance

Physical damage: vibrations cause foundations to crack

Impaired enjoyment: nauseating stench from pig farm
Non-intrusive: brothel attracts traffic and criminals to
neighbourhood
Activities not likely to be held a nuisance
Blocking view or sunshine
Ugly building reducing property value

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 Determining if Unreasonable
Interference
Courts consider a number of factors
nature of neighbourhood
time and day of interference
intensity and duration of interference
social utility of interference
defendants motivation

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 Defences to Nuisance

Generally interpreted very narrowly

consent to activity
statutory authority
defendant acted pursuant to legislation
nuisance inevitable result of statutory action
Moving to nuisance is not a defence
irrelevant who was in neighbourhood first

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 Remedies for Nuisance

Compensatory damages to repair losses

Injunction to prevent future losses
Injunction unlikely if
Damages sufficient to compensate, or
Will create intolerable hardship to defendant or community
eg huge loss due to towns single factory being closed down
Sometimes injunction and compensatory damages
awarded together

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 Rule in Rylands v Fletcher
Definition
Defendant strictly liable for non-natural use of land if
something escapes their property and injures plaintiff
Plaintiff must prove
non-natural land use created special and unusual danger
escape from defendants land
loss or injury to plaintiff
No need to prove fault or carelessness

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 Defences to
Rule in Rylands v Fletcher
Plaintiff consented to non-natural land use
Unavoidable act of God or third party caused escape
Injury inevitable result of defendants exercise of
statutory authority
Risk management:
Businesses should take special precautions when engaging
in non-natural land use

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 Defamation

Definition
Making a false statement that could lead a reasonable
person to have lower opinion of plaintiff
Purpose: to protect reputations

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 Elements of Defamation

Plaintiff must prove

statement reasonably refers to plaintiff
irrelevant that defendant did not intend reference
plaintiff must be living person
group statement must refer to plaintiff personally
statement could hurt plaintiff s reputation
statement was published to third party

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 Defamation

Includes any communication (eg spoken, written,

gestures, documents, and puppet shows)
Risk management:
Business faces special risk when trying to enhance own
reputation by disparaging competitors
Social media presents risks to employers
Vicarious liability for employees defamation, and
Directly as potential publisher of defamatory material

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 Defences to Defamation
Include:
Justification
Privilege: encourages free speech
Absolute privilege
Qualified privilege
Fair comment: encourages useful debate on significant
issues
Justification: statement is actually true
honest and reasonable belief in truth insufficient

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 Defence: Absolute Privilege
Complete immunity from liability
No liability even if statement made in bad faith
Limited to statements made:
during parliamentary proceedings
between high government officials dealing with government
business
by a judge, lawyer, litigant, or witness in legal proceedings
between spouses

Managing the Law, 4e Copyright 2014 Pearson Canada Inc. Chapter 5-31
 Defence: Qualified Privilege
Applies when legal, moral or social obligation to make
a statement to someone with a similar duty or interest
in receiving it
Liability if statement made in bad faith or motivated by
malicious purpose
Important application of this defence arises under the
label of public interest responsible journalism

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 Defence: Fair Comment
Expression of an opinion on a matter of public
importance:
Opinion must be informed
Opinion must relate to issue of public interest
Defence applies as long as the opinion in question could
honestly be held by some person even if the defendant is
prejudiced or opinionated

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 Remedies for Defamation

Usually compensatory damages to repair losses and

sometimes for personal distress
Sometimes punitive damages for outrageous conduct
Injunction to prevent defamation
rarely awarded due to concern for free speech
requires clear evidence that defamation is likely

Managing the Law, 4e Copyright 2014 Pearson Canada Inc. Chapter 5-34
 Injurious Falsehood

Definition
false statement about a business causes loss to business
Tort may take variety of forms
Slander of Title: false statements that plaintiff does not
own land, making sale difficult
Slander of Quality: false disparagement of plaintiff s
products
Other false statements: eg that property haunted

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 Elements of Injurious Falsehood

Plaintiff must prove

defendant made false statement to third party
defendant acted out of malice
persuasive evidence that false statement caused loss

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