Chapter 15 Guidance on answering the end-of-chapter problem questions
There is the potential that Sally has conspired with Gems in order to cause damage to Plus Diamonds. Gems and Sally are different legal persons and authority suggests that they can combine: Belmont Finance v Williams Furniture. The claimant would have to prove an intention (which need not be predominant) to injure it under one of the formulations of unlawful means conspiracy in Total Network. There is evidence of intention because Sally intends to undercut Plus Diamonds. However, this might be seen as by way of competition and insufficient. If the prior elements are established, then the use of unlawful means would be clear in the sourcing of illegal diamonds (pursuant to the Economic Sanctions Act 2011) and it does not matter whether Plus Diamonds has an independent action for the breach (such as breach of statutory duty): Total Network. The conspiracy must have caused damage to the claimant and this is proven in Plus Diamonds’ reduced profitability. There is a potential case of inducing breach of contract as regards the Plus Diamonds’ employees who are ‘persuaded’ to work for Gems (but not for agents whose contracts have been renegotiated). The elements of inducing breach of contract are: inducing the breach, which can arise through persuasion/procurement of the counterparty: Lumley v Gye; Meretz Investments v ACP; breach of the contracts, which occurs when the workers resign and move to Gems – but only when they do not give the required contractual notice: Boxfoldia Ltd v National Graphic Assocn; knowledge by the defendant of the contract(s)(Mainstream Properties v Young), which must have been present on the facts; intention to induce the breach (OBG v Allan); and the suffering of harm. Note that if Plus Diamonds has a reduced need for the employees (because business has tailed off), then the amount of harm that it has suffered will be lower than it would have been otherwise.