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Inducing Inducing

Breach of ContractBreach of Contract

Bus 393 PresentationBus 393 Presentation

Charles Chou Cody WatsonCharles Chou Cody WatsonQueenie Chou Kelly ChanQueenie Chou Kelly Chan

March 7th, 2007

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Objective of PresentationObjective of Presentation

Introduce the concept of Introduce the concept of inducing breach of contractinducing breach of contract

- History- History

- Elements- Elements

- Defences - Defences

Walk through case involving this Walk through case involving this intentional tort in a mock court intentional tort in a mock court

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History History

Decision in Lumley v Gye 1853Decision in Lumley v Gye 1853

- inducing singer to breach - inducing singer to breach contractcontract

- court: defendant’s action was - court: defendant’s action was tortuous tortuous

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Definition Definition

An intentional tort in which An intentional tort in which the defendant causes a third the defendant causes a third party to break his contract party to break his contract with the plaintiff. with the plaintiff.

ExampleExample

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Classic Inducing Classic Inducing Breach of ContractBreach of Contract

Direct inducement of breach of Direct inducement of breach of contractcontract

““Mere advice is not sufficient to Mere advice is not sufficient to constitute persuasion”constitute persuasion”

Ingredients: Ingredients:

Procurement Procurement

KnowledgeKnowledge

IntentionIntention

Actual BreachActual Breach

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1.A valid contract existed between 1.A valid contract existed between plaintiff and a third party plaintiff and a third party

2. The defendant knew of the 2. The defendant knew of the existence of this contract existence of this contract

3.The defendant intentionally 3.The defendant intentionally engaged in acts or conduct which engaged in acts or conduct which induced the third party to breach induced the third party to breach the contract with plaintiff the contract with plaintiff

6 Elements of Inducing 6 Elements of Inducing Breach of ContractBreach of Contract

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4. The defendant intended to induce 4. The defendant intended to induce a breach of such contract a breach of such contract

5. The contract was in fact breached 5. The contract was in fact breached

6. The acts and conduct of the 6. The acts and conduct of the defendant which induced the defendant which induced the breach caused damage to the breach caused damage to the plaintiff plaintiff

6 Elements of Inducing 6 Elements of Inducing Breach of ContractBreach of Contract

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ExceptionException

Tort of inducing breach of contract Tort of inducing breach of contract requires proof of a breachrequires proof of a breach

ButBut cause of action for interference cause of action for interference with contractual relations is distinct with contractual relations is distinct and requires only proof of and requires only proof of interference interference

Pacific Gas v Electric CoPacific Gas v Electric Co

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Defence of JustificationDefence of Justification

Protecting Private RightProtecting Private RightExample: Collision of contractsExample: Collision of contracts

Protecting Private InterestProtecting Private Interest Example: Legris v MarcotteExample: Legris v Marcotte

Protecting Public InterestProtecting Public Interest Example: Public health and Example: Public health and

safetysafety

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Court in ActionCourt in Action

DrouillardDrouillard

vs. vs.

Cogeco CableCogeco CableJudge: Kelly Chan

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PartiesParties

PlaintiffPlaintiff::

Drouillard Drouillard

vs vs

DefendantDefendant::

Cogeco Cable Inc. and Phasecom Cogeco Cable Inc. and Phasecom Systems Inc, now carrying business Systems Inc, now carrying business as Mastec Canada as Mastec Canada

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The facts: PlaintiffThe facts: Plaintiff

After 15 years of employment, After 15 years of employment, Plaintiff resigned to pursue Plaintiff resigned to pursue employment in the United employment in the United StatesStates

Returned to Windsor after 2 Returned to Windsor after 2 years in hopes to resume career years in hopes to resume career in cable businessin cable business

Hired by Mastec on two Hired by Mastec on two occasionsoccasions

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The facts: Plaintiff (2)The facts: Plaintiff (2)

Mastec: an independent outside Mastec: an independent outside contractorcontractor

Mastec hires technicians (much Mastec hires technicians (much like the Defendant) to perform like the Defendant) to perform installations/servicing in installations/servicing in Windsor/Essex CountyWindsor/Essex County

Cogeco is Mastec’s largest Cogeco is Mastec’s largest customercustomer

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Claim: PlaintiffClaim: Plaintiff

Reason of termination from Reason of termination from Mastec is in relation to Cogeco’s Mastec is in relation to Cogeco’s dislike for the plaintiffdislike for the plaintiff

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The facts: DefendantThe facts: Defendant

Cogeco: Refusal for Mr. Drouillard Cogeco: Refusal for Mr. Drouillard to work on Cogeco equipment to work on Cogeco equipment was based to Mr. Drouillard’s was based to Mr. Drouillard’s negative attitude and moralsnegative attitude and morals

Mastec: Drouillard did not Mastec: Drouillard did not mitigate his losses mitigate his losses

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PlaintiffPlaintiff

Represented by: Represented by:

Charles ChouCharles Chou

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PlaintiffPlaintiff

Client IssueClient Issue Mr. Kevin DrouillardMr. Kevin Drouillard Former employee of CogecoFormer employee of Cogeco Worked 15 years as a technicianWorked 15 years as a technician Outstanding track recordOutstanding track record Witness, Rudy Dauncey, plaintiff’s Witness, Rudy Dauncey, plaintiff’s

supervisor describes Plaintiff’s to be:supervisor describes Plaintiff’s to be: ““being very effective in trouble shooting on being very effective in trouble shooting on

outages and that he had developed an outages and that he had developed an excellent knowledge of the optical receivers “excellent knowledge of the optical receivers “

““good communication and inter-personal skills good communication and inter-personal skills and that he worked well with the staff.” and that he worked well with the staff.”

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PlaintiffPlaintiff Applied to Mastec – spoke with Jim Vine Applied to Mastec – spoke with Jim Vine

and Don Lachriteand Don Lachrite Offer and acceptance - Feb 8, 2001Offer and acceptance - Feb 8, 2001 Later informed him that they are not able to Later informed him that they are not able to

hire him hire him Hinted Leo D’Agostini, original Plaintiff’s Hinted Leo D’Agostini, original Plaintiff’s

manager and Cogeco’s employee, harboured manager and Cogeco’s employee, harboured some dislike of the Plantiff.some dislike of the Plantiff.

Hired by Mastec for second time to Hired by Mastec for second time to commence work on May 28,2001 commence work on May 28,2001

After working on his first case, Plaintiff’s was After working on his first case, Plaintiff’s was dismissed from work again. Reason given: dismissed from work again. Reason given: Cogeco has expressed dislike towards PlaintiffCogeco has expressed dislike towards Plaintiff

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PlaintiffPlaintiff

Sue for Mastec for breach of Sue for Mastec for breach of contractcontract

Sue Cogeco for inducing breach Sue Cogeco for inducing breach of contractof contract

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Supporting CaseSupporting Case

Precedent Case: Precedent Case: Reach M. D. Inc. Reach M. D. Inc. v. Pharmaceutical Manufacturers v. Pharmaceutical Manufacturers Association of Canada, et al, Association of Canada, et al, 65 65 O.R.(3d) O.R.(3d)

Plaintiff “Reach” created a Plaintiff “Reach” created a calendar for distribution to the calendar for distribution to the medical community, but the medical community, but the Defendant (“P.M.A.C.”) warned its Defendant (“P.M.A.C.”) warned its members that advertising in such members that advertising in such a calendar could jeopardize an a calendar could jeopardize an individual’s membership in individual’s membership in P.M.A.C. P.M.A.C.

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Supporting CaseSupporting Case

P.M.A.C.’s actions were fatal to P.M.A.C.’s actions were fatal to Reach’s business and it sued Reach’s business and it sued P.M.A.C. for various economic torts. P.M.A.C. for various economic torts.

Laskin J.A. identified the three Laskin J.A. identified the three elements which have to be proved in elements which have to be proved in order to establish the tort of order to establish the tort of intentional interference with intentional interference with economic relations :economic relations :

(i)   P.M.A.C. intended to injure Reach.(i)   P.M.A.C. intended to injure Reach. (ii)  P.M.A.C. interfered with Reach’s (ii)  P.M.A.C. interfered with Reach’s

business by illegal or unlawful means.business by illegal or unlawful means. (iii) As a result of the interference Reach (iii) As a result of the interference Reach

suffered economic loss.suffered economic loss.

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Element IElement I

The actions of Cogeco were The actions of Cogeco were directed against the Plaintiff directed against the Plaintiff personally. Various comments personally. Various comments that were made by D’Agostini to that were made by D’Agostini to cause Plaintiff to lose his job are cause Plaintiff to lose his job are sufficient to fulfill first elementsufficient to fulfill first element

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Element IIElement II To fulfill the second element. To fulfill the second element.

Another case can be inferred. Another case can be inferred. Lord Denning in Lord Denning in Torquay Hotel Torquay Hotel

Co. Ltd., v. Cousins Co. Ltd., v. Cousins [1969] 1 All [1969] 1 All E.R. 522 where he stated:E.R. 522 where he stated:

 “ “If one person deliberately If one person deliberately interferes with the trade or the interferes with the trade or the business of another, and does so business of another, and does so by unlawful means, that is, by an by unlawful means, that is, by an act, which he is not at liberty to act, which he is not at liberty to commit, then he is acting commit, then he is acting unlawfully, even though he does unlawfully, even though he does not procure or induce any actual not procure or induce any actual breach of contract. If the means breach of contract. If the means are unlawful, that is enough.”are unlawful, that is enough.”

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Element IIElement II

The secret and unsupported The secret and unsupported evidence that D’Agostini evidence that D’Agostini convinced Mastec to act on is an convinced Mastec to act on is an illegal act or one without legal illegal act or one without legal justification.justification.

Simply doesn’t satisfy the Simply doesn’t satisfy the “reasonable cause” “reasonable cause”

Thus, second element is fulfilledThus, second element is fulfilled

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Element IIIElement III

On two occasions, the Plaintiff On two occasions, the Plaintiff had a job and on two occasions had a job and on two occasions it was taken from him. That he it was taken from him. That he has suffered an economic loss is has suffered an economic loss is obvious obvious

Third element of this tort has Third element of this tort has been establishedbeen established

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DefendantDefendant

Represented by: Represented by:

Cody WatsonCody Watson

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DefendantDefendant

Client IssuesClient Issues Cogeco Cable Inc.Cogeco Cable Inc.

Employed Mr. D for 15 years (84-99)Employed Mr. D for 15 years (84-99) Requested that Mr. D not work on Requested that Mr. D not work on

Cogeco propertyCogeco property Phasecom Systems Inc. (Mastec Phasecom Systems Inc. (Mastec

Canada)Canada) Began employing Mr. D after return to Began employing Mr. D after return to

Canada (Feb/May 01)Canada (Feb/May 01) Offered Mr. D employment in an Offered Mr. D employment in an

alternative location in order to honour alternative location in order to honour the contractthe contract

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Defendant (Cogeco)Defendant (Cogeco)

Informed Mastec and Silverline Informed Mastec and Silverline that we did not wish for Mr. that we did not wish for Mr. Drouillard to work on equipmentDrouillard to work on equipment Attitude and fellow employee moral Attitude and fellow employee moral

are of concernare of concern Our four witnesses have testified Our four witnesses have testified

that Mr. D made negative that Mr. D made negative comments about the companycomments about the company

Mr. D was seen taking coffee Mr. D was seen taking coffee breaks in the morning with other breaks in the morning with other employees in local parking lotsemployees in local parking lots

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Defendant (Cogeco) cont.Defendant (Cogeco) cont.

Practice of disallowing employees Practice of disallowing employees from working on company from working on company equipment is common in the equipment is common in the industryindustry

After July of 2001, work dried up at After July of 2001, work dried up at Mastec as Cogeco began to use its Mastec as Cogeco began to use its own employees for the majority of own employees for the majority of workwork

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Defendant (Mastec)Defendant (Mastec)

Original (Feb 01) offer for Original (Feb 01) offer for employment was withdrawn with employment was withdrawn with just cause (warning from Cogeco)just cause (warning from Cogeco)

Offered Mr. Drouillard employment Offered Mr. Drouillard employment in the London areain the London area

Mr. D rejected this offer on Mr. D rejected this offer on grounds of unwillingness to grounds of unwillingness to commutecommute

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Defendant (Mastec) cont.Defendant (Mastec) cont.

Plaintiff has failed to mitigate his Plaintiff has failed to mitigate his losses in the offer for work in losses in the offer for work in London (Feb & Mar 01)London (Feb & Mar 01) Rejected this offer due to commute Rejected this offer due to commute

timetime London work would incur higher London work would incur higher

income (different contractor)income (different contractor) Offer was made to pay for commute Offer was made to pay for commute

($8.60/hr + gasoline)($8.60/hr + gasoline) Plaintiff had previously commuted in Plaintiff had previously commuted in

his position in the United Stateshis position in the United States

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Defendant (Mastec) cont.Defendant (Mastec) cont.

Not equivalent to a wrongful Not equivalent to a wrongful dismissal casedismissal case Plaintiff must prove his damagesPlaintiff must prove his damages Onus rests with plaintiff because this Onus rests with plaintiff because this

is a tort caseis a tort case Mr. D must prove that he Mr. D must prove that he

attempted to mitigate his damagesattempted to mitigate his damages Mr. D could NOT have earned Mr. D could NOT have earned

$80,000 per year as in the US$80,000 per year as in the US This is based entirely on speculation This is based entirely on speculation

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RecessRecess

Discuss: Discuss:

What do you think are the What do you think are the possible judgements in this possible judgements in this case?case?

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Judgement: Supporting Judgement: Supporting CaseCase

Recall previous case, Recall previous case, Reach Reach M.D. Inc. vs. P.M.A.C.M.D. Inc. vs. P.M.A.C.

First element of tort:First element of tort: ““P.M.A.C. intended to injure P.M.A.C. intended to injure

Reach.”Reach.” No question that Plaintiff was targeted No question that Plaintiff was targeted

personallypersonally

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Judgement: Supporting Judgement: Supporting Case(2)Case(2)

““ P.M.A.C interfered with P.M.A.C interfered with Reach’s business by illegal or Reach’s business by illegal or unlawful means.”unlawful means.” Cogeco Cogeco did did have rights to have rights to

determine who works on its determine who works on its equipmentequipment

The way it applied those rights The way it applied those rights were wrongwere wrong

Secrecy and unsupported evidence Secrecy and unsupported evidence lacked “reasonable cause”lacked “reasonable cause”

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Judgement: Judgement: Supporting Case (3)Supporting Case (3)

““ As a result of the interference As a result of the interference Reach suffered economic loss.”Reach suffered economic loss.” Drouillard had two jobs taken from Drouillard had two jobs taken from

himhim Economic loss is obviousEconomic loss is obvious

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Judgement: WitnessesJudgement: Witnesses

Witnesses testified that they Witnesses testified that they heard Plaintiff make negative heard Plaintiff make negative comments about the companycomments about the company

No proof that comments No proof that comments regardedregarded Operation Operation PerformancePerformance MoraleMorale

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Judgement: July 2001Judgement: July 2001

Defence claimed that there was Defence claimed that there was no work in July 2001, and no work in July 2001, and Cogeco had to use its own Cogeco had to use its own employeesemployees

What’s troubling:What’s troubling: Cogeco laid off 50-60 employees, Cogeco laid off 50-60 employees,

yet did not hire independent yet did not hire independent contractors to do everyday taskscontractors to do everyday tasks

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Judgement: MastecJudgement: Mastec

Mastec had an obligation to Mastec had an obligation to keep its primary customer-keep its primary customer-Cogeco, happyCogeco, happy

Mastec offered many other Mastec offered many other options to the Plaintiff to which options to the Plaintiff to which he declinedhe declined

Verdict against Mastec: Verdict against Mastec: DismissedDismissed

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Judgement: DamagesJudgement: Damages

Witnesses’ statements confirmed Witnesses’ statements confirmed that income following July 2001 that income following July 2001 would be only $45,000 annually-a far would be only $45,000 annually-a far figure from $80,000figure from $80,000

Plaintiff could not contradict thisPlaintiff could not contradict this

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Final JudgementFinal Judgement

36 months of income: $137,53536 months of income: $137,535 Humiliation, loss of Humiliation, loss of

reputation:reputation: $ 62,465 $ 62,465 Total: Total: $200,000 $200,000

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Court Dismissed Court Dismissed

Thank you!!Thank you!!QUIZ

TIME!!!