How to Avoid “Tortifying” Regulatory Law: A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12

The Supreme Court of Canada this morning waded into the mire of the “economic torts”, a grab bag of common law causes of action that impose liability for (primarily) nasty behaviour in the marketplace. Up for discussion in A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 was the “unlawful means” tort, though as Cromwell J. pointed out, the economic torts form such a morass that courts and commentators cannot even identify the appropriate label for this particular creature (at para. 2).

They do agree on its general shape, however. There must be an intentional interference with the plaintiff’s economic interests by the defendant by means of an unlawful act against a third party:

[24]                          An old case will serve as an example. The defendant, the master of a trading ship, fired its cannons at a canoe that was attempting to trade with its competitor, the plaintiffs’ trading ship, in order to prevent it from doing so. The defendant was held liable, Lord Kenyon being of the opinion that these facts supported an action:  Tarleton v. M’Gawley(1793), Peake 270, 170 E.R. 153. The plaintiffs were able to recover damages for the economic injury resulting from the defendant’s wrongful conduct toward third parties (the occupants of the canoe) which had been committed with the intention of inflicting economic injury on the plaintiffs.

There has been vibrant discussion in the cases and commentary of what precisely “unlawful means” amounts to. Does it require something independently actionable by the plaintiff or would a breach of the criminal law or some regulatory provision suffice?

The relevance for public lawyers should be obvious. Are regulatory breaches to be left to regulators, or should room be made for private enforcement? Strong arguments have been made that any conduct prohibited by law, including regulatory requirements, should serve as the basis for the “unlawful means” tort. Cromwell J. was unpersuaded:

[45]                          This rationale of the tort supports a narrow definition of “unlawful means”: the tort does not seek to create new actionable wrongs but simply to expand the range of persons who may sue for harm intentionally caused by existing actionable wrongs to a third party. Thus, criminal offences and breaches of statute would not be per se actionable under the unlawful means tort, but the tort would be available if, under common law principles, those acts also give rise to a civil action by the third party and interfered with the plaintiff’s economic activity. For example, crimes such as assault and theft would be actionable by a third party in the torts of trespass to the person and conversion.  But other breaches of criminal or regulatory law will not give rise to a civil action and there will be therefore no potential liability under the unlawful means tort.  This approach avoids “tortifying” the criminal and regulatory law by imposing civil liability where there would not otherwise be any: see OBG, at paras. 57 and 266. The two core components of the unlawful means tort are thus that the defendant must use unlawful means, in the narrow sense, and that the defendant must intend to harm the plaintiff through the use of the unlawful means.

However, Cromwell J. was not bold enough to impose this narrow definition of “unlawful means” on conspiracy and intimidation, two other economic torts where the Canadian courts have taken a broader view (at para. 67). He followed the House of Lords in disavowing a “general requirement of consistency in the elements of the economic torts” (at para. 68):

[69]                          I conclude that it is not necessary to seek identical treatment of the unlawful means component for all of the torts of which it is a requirement. The Court has not insisted on this uniformity in the past and there are reasons of principle that support different approaches in different contexts. Of course, my reasons in this case are confined to the unlawful means tort and nothing I have said should be taken as opining on the elements of other torts which are not before us for decision in this case.

Perhaps the Court will be open to revising its position in future, but that would plainly require an overarching approach to the relationship between tort law and regulation.

This content has been updated on June 11, 2014 at 09:45.