• Ellen Vandergrift

Business (torts) as usual, for the most part

It has been a little over a year since the SCC clarified the tort of causing loss by unlawful means in A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12. Before Bram, the law relating to the tort of causing loss by unlawful means was in an “unfortunate state” and the law relating to economic torts generally was "in a mess" (at para. 28).


Bram clarifies both the intention and unlawful means requirements for the tort of causing loss by unlawful means: it is available in three-party situations in which the defendant intends to cause economic harm to the plaintiff and commits an unlawful act against a third party which results in economic harm to the plaintiff. The unlawful act must be actionable by the third party or actionable if the third party had suffered loss as a result of it.


The SCC provided the desired certainty for the tort of causing loss by unlawful means: it has led to appropriate amendments, dismissals and judgments in cases decided over the past year. It has not provided any consistency in nomenclature, however, as many cases still refer to the tort as “interference with economic relations.”


Further Clarification of Unlawful Means


Bram allows that “details regarding the scope of what is ‘actionable’ may need to be worked out in the future” (at para. 78), and courts have neatly dealt with these issues on a preliminary basis, deciding that unlawful means may include:

  • conduct giving rise to a statutory cause of action by the third party under the Patented Medicines (Notice of Compliance) Regulations, SOR/ 93-133 (Low v. Pfizer Canada Inc., 2014 BCSC 1469, at paras. 49-50);

  • a breach of the Competition Act, R.S.C. 1985, c. C-34, giving the third party a statutory right to sue for damages (despite recent Court of Appeal obiter dicta to the contrary, which was read to be inconsistent with Bram and therefore inapplicable) (Pro-Sys Consultants Ltd. v. Microsoft Corp., 2014 BCSC 1280, at paras. 84-5; approved and followed in Fairhurst v. Anglo American PLC, 2014 BCSC 2270, at para. 15);

  • a breach of a foreign anti-trust statute which would give rise to an action for damages by the third party in another jurisdiction (Pro-Sys Consultants Ltd. v. Microsoft Corp., 2014 BCSC 1280, at paras. 75-78); and

  • unlawful means conspiracy, as long as it would be actionable by the third party (Pro-Sys Consultants Ltd. v. Microsoft Corp., 2014 BCSC 1280, at paras. 82-3).

Basic Principles Applicable to All Economic Torts


Bram expressly identifies a number of principles relating to the proper approach of tort law to the regulation of economic and competitive activity:

  • Tort law has traditionally accorded less protection to purely economic interests than to physical integrity and property rights (para. 30);

  • The common law has traditionally been reluctant to develop rules about fair competition: the common law in general, and tort law in particular, have been astute to assure "some elbow-room [many would say much elbow-room] for the aggressive pursuit of self-interest" (para. 31, citing C. Sappideen and P. Vines, eds., Fleming's The Law of Torts (10th ed. 2011), at para. 30.120);

  • The common law has generally promoted legal certainty for commercial affairs: that certainty is jeopardized by vague legal standards based on "commercial morality" that depend on the "idiosyncrasies of individual judges" (para. 33)

  • There is a risk inherent in the economic torts generally that they allow the courts to undermine legislated schemes favouring collective action and interfere with constitutionally protected rights of expression and association (para. 34); and

  • Courts should avoid “tortifying” the criminal and regulatory law by imposing civil liability where there would not otherwise be any (para. 45).

Bram also confirms that there is no single unifying principle underlying the economic torts generally (para. 36) and that there is no need for consistency in the unlawful means components of the various torts (paras. 62 and 69). The economic torts have distinct historical roots and roles to play in the regulation of the modern marketplace (para. 68). While the decision sets out the elements of several other torts as outlined in previous decisions of the Court, it explicitly states that nothing in the judgment should be taken as “opining on the elements of the other torts which are not before us for decision” (at para. 69).


These general principles were relied upon in Maxam Opportunities Fund Ltd. Partnership v. 729171 Alberta Inc., 2015 BCSC 271, at para. 178, to support a strict test for intention for the tort of inducing breach of contract. These principles will continue to provide needed guidance when issues arise.


The effect of Bram on specific torts is addressed below.


Conspiracy Claims Generally


Bram discusses civil conspiracy at several points in the judgment, but particularly at para. 68:

…it may well be that the presence of an agreement in the tort of conspiracy justifies a different and broader definition of "unlawful means" for the tort of "unlawful means" conspiracy than is appropriate for the unlawful means tort. This is illustrated by the Court's retention, although as an anomaly, of the so-called predominant purpose conspiracy tort on the basis that the fact of agreement between conspirators (or "combination") could itself justify imposing liability: see, e.g., LaFarge, at pp. 471-72, per Estey J.


These comments have been read as affirming the retention of both forms of conspiracy (Spartek Systems Inc. v. Brown, 2014 ABQB 526, at para. 132).


Unlawful Means Conspiracy Particularly


Pro-Sys Consultants Ltd. v. Microsoft Corp., 2014 BCSC 1280, squarely addresses the question whether the unlawful means requirement for unlawful means conspiracy should mirror that set out in Bram for the unlawful means tort. Pro-Sys is a class action in which the representative plaintiffs allege that Microsoft engaged in unlawful conduct by overcharging for its PC operating systems and applications software. In 2013, the SCC had largely upheld the certification of that case as a class action: 2013 SCC 57. However, the SCC left it open to the parties to come back to the BCSC with respect to the unlawful means torts:


82 Microsoft argues that the claims for unlawful means conspiracy and intentional interference with economic interests should be struck because their common element requiring the use of "unlawful means" cannot be established.

83 These alleged causes of action must be dealt with summarily as the proper approach to the unlawful means requirement common to both torts is presently under reserve in this Court in Bram... Suffice it to say that at this point it is not plain and obvious that there is no cause of action in unlawful means conspiracy or in intentional interference with economic interests. I would therefore not strike these claims. Depending on the decision of this Court in Bram, it will be open to Microsoft to raise the matter in the BCSC should it consider it advisable to do so.


Back at the BCSC post-Bram, Microsoft argued Bram should be read to impose the same unlawful means requirement on a claim for unlawful means conspiracy as was imposed on the unlawful means tort. It argued it would be illogical to have two separate standards. This argument was rejected: the judge pointed to the explicit statements in Bram indicating that different considerations apply and that the reasons should not be taken as opining on the elements of other torts.


Further, the judge interpreted Bram to mean that, according to the SCC, the "not at liberty to commit" standard for conspiracy survives. He concluded that this standard is wide enough to encompass breaches of the Competition Act, R.S.C. 1985, c. C-34, thereby finding a justification to reject recent obiter to the contrary from the BCCA (at para. 60). Pro-Sys was approved and followed on this point in Fairhurst v. Anglo American PLC, 2014 BCSC 2270, at para. 15.


Inducing Breach of Contract


Although technically obiter, Bram dictates that, for the tort of inducing breach of contract, the plaintiff must prove that the defendant actually understood that he or she was procuring a breach of contract (para. 93). Bram has subsequently been relied upon for this proposition (Maxam Opportunities Fund Limited Partnership v. 729171 Alberta Inc., 2015 BCSC 271, at para. 175, and Aldo Group Inc.v. Moneris Solutions Corp., 2015 ONSC 2084, at para. 39).


Intimidation


Bram articulates the tort of intimidation as follows:


Intimidation is committed when the defendant threatens to commit an unlawful act and in so doing causes loss to the person threatened (two-party intimidation) or to a third party (three-party intimidation).


In Red Chris Development Co. v. Quock, 2014 BCSC 2399, relying on Bram, the court found that threats to continue blockading roads to a mine site arguably constituted both two-party and three-party intimidation, and granted an interim injunction (at paras. 55-56).


Going Forward


It will be interesting to see how the courts continue to formulate and apply the economic torts, following the guidance in Bram, to determine what constitutes vigorous but lawful competitive behavior and what crosses the line.

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