Crystalens Limited v White & Ors QBD (Com)
- Date: 07/07/2006
Extempore
Related Barrister: Christopher Stirling
This was an application for strike out and summary judgment in the Commercial Court on an action by the Claimant that the second Defendant, Dr White, had as the managing director of CRL Limited procured CRL to breach its contract with the Claimant, Crystalens Limited and/or interfered in the contractual relations of Crystalens and CRL.
The application to strike out was primarily based on the long established authority of Said v Butt [1920] 3 KB 497 that a director of a company could not be liable in tort for procuring his own company to breach its contract so long as he acted bona fide and within the scope of his authority. The Claimant resisted the application on the basis of a passage in Clerk & Lindsell on Torts, 19th Edn at para 25-44 that suggested a director may be so liable if he possessed the requisite knowledge and intention to make out the tort. A number of authorities were cited in a footnote to this suggestion including the well known copyright case of Evans Sons ltd v Spritebrand Ltd [1985] 1 W.L.R. 317.
Gloster J held:
1. The rule in Said v Butt remained good law having been approved by the Court of Appeal by Lord Evershed M.R. in DC Thompson v Deakin [1952] Ch. 646 and more recently by Dillon L.J. in Welsh Development Agency v Export Finance Co Limited [1992] BCLC 148 – Dillon L.J. had expressed doubts as to the reasoning for the rule but felt it was such an established precedent it would be wrong to interfere with it.. Moreover it had been followed in other common law jurisdictions including Australia, Canada and New Zealand.
2. In so far as the passage in Clerk & Lindsell suggested a qualification to the rule in Said v Butt it was not supported by the authorities in the footnote. These dealt with the liability of directors for quite different torts and none of them considered the tort of procuring the breach of contract or interfering with contractual relations. There was therefore no such qualification in English law.