006-NLR-NLR-V-56-G.-C.-G.-BARRETT-Appellant-and-MRS-.-A.-F.-ALTENDORFF-Respondent.pdf
GRATIAEN J.—Barren o. Altendorff
26
1954Present: Gratiaen J. and Fernando A.J.,C. G. BARRETT, Appellant, and MRS. A. F. ALTENDORFF,
Respondent
S. C. 447—D. C‘Colombo, 21,370
Delict—Inducement 0/ breach 0/ contract—Ingredients of the wrong.
A. sued B. in delict alleging that B. had induced A.’s employer G. to break
’s contract of service with G. O. was an incorporated Company and B. wasthe Manager of the Ceylon Branch of that Company. It was established that
acted within the scope of his authority as agent of C. when he terminatedA.’s services.
Held, that, even if C. had unlawfully terminated the contract, B. wasnot personally liable for any damage resulting to A.
.^^PPEAL from a judgment of the District Court, Colombo..
V. Perera, Q.C., with. S. J. Kadirgamar and B. S. C. Hal watte, forthe defendant appellant.
N. E. Weerasooria, Q.C., with J. A.respondent.
Cooray, for the plaintiffCur. adv. vult.
June 2, 1954. Gratiaen J".—
e
The appellant was the Manager of the Ceylon Branch of the DunlopRubber Company Ltd. (hereinafter called “ the Company ”). Therespondent had originally been employed in the Colombo office as amember of the Company’s temporary staff, but on 31st March 1949she was confirmed in her appointment as a stenographer. The termsof her employment provided, inter alia, that she should receive a monthlysalary of Rs. 200 and that the contract could be terminated by eitherparty giving one month’s notice to that effect. (PI.)
On 27th May, 1949, according to her evidence, she was reprimandedfor arriving late in the office. On the next day, having previouslydrawn her pay for the current month, she received a letter from theappellant stating that her services would no longer be required by theCompany, but that she could immediately draw her “ basic salary ”for June (P2). This sum was in fact paid to her by cheque on 30th May,1949, and a few days later she received (and accepted) a further sum ofRs. 107 representing “ dearness allowance ” for the month of June.There is no evidence as to how or when the amount of this allowancefell to be computed for each ensuing month, or as to whether she wasentitled to it as of right as part of her remuneration. Indeed, no issuewas framed covering these points. My reason for referring to, thiscircumstance will become clear at a later stage of my judgment.
2—LVI
8—J. N. B 38969-1,592 (10/54)
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GRATIAEN J.—Barrett v. AUendorJf
On 20th June 1049, the respondent sued the appellant in delict forthe recovery of Its. 2,500 as damages from him personally, the causeof Aotion' alleged being that he had “ by wrongful and unlawful meansmaliciously and with intent to injure her caused the Company to terminatethe contract of employment with her without just cause She pre-ferred no claim against the Compafiy itself for breach of contract, andno such remedy was available to her. The contract had been dulyterminated by one month’s notice, and the Company’s outstandingcontractual obligation to pay her the stipulated remuneration (even ifit included “ dearness allowance ”) for the month of June had beendischarged before the date on which she could strictly have claimed it.(Her corresponding obligation to perform any services during that monthhad, of course, been waived by the letter P2.)*
In Quinn v. Leatham *, Lord Macnaghten, explaining Lumley v.Gye2,said, “ It is a violation of legal right – to interfere with contractualrelations recognised by law, if there be no justification for the inter-ference ”. In a more recent authoritative pronouncement, Lord Simonsaid that, apart from the effects of combination (or conspiracy) to injurea man in his trade,
“ If C has an existing contract with A, and B is aware of it, andif B persuades or induces C to break the contract, with resulting damageto A, this is, generally speaking, a tortious act for which B will beliable to A for the injury he has done him. In some cases, however,B may be able to justify his procuring of the breach of contract ”—Veitch's case2.
The Roman-Dutch law recognises the same principle—vide the SouthAfrican cases cited in McKerron’s Law of Delict (4th Ed.) p. 310 n. 1.
The learned District Judge decided that the respondent had establishedher cause of action, and awarded her damages in a sum of Rs. 614.The basis of his judgment is that the defendant had “ withoutjustification ” (though not “ maliciously ” as the plaint alleges) causedthe Company to break its contract with the, respondent.
Admittedly, the respondent could not succeed in her claim unless thefacts proved at the trial justified, inter alia, the following conclusions :
that the Company had committed a breach of its contractual obli-
gation to employ her ; and further'
that the breach of contract had “ without justification ” been
“ induced ”, “ procured ” or “ caused ” by the appellant.
The learned judge took the view that both elements had been established.In my opinion, his decision on each of these issues was vitiated by mis-direction on essential matters.'
The only reason recorded for deciding that the contract had beenwrongfully terminated was that, although the stipulated notice of
f •
1 {1901) A. C. 495.* {1853) 2 E. and B. 216.
3 {1942) A. O. f 35-
GRATIAEN J.—Barrett v. AUendorff
27
termination was duly given, the Company had nevertheless “committedthe fatal blunder ” (sic) of not paying or tendering to the respondentthe full wages that were due to her for the month of June 1949, whenshe was served with the notice P2. The theory, apparently, is that,having expressly offered her the concession of drawing her “ basicsalary ” from the cashier in advance of the due date, the Company hadinferentially repudiated in anticipation its (assumed) outstandingobligation to pay her “ dearness allowance ” at any time thereafter.Starting from that hypothesis, he concluded that the eventual paymentof the “ dearness allowance ” (also, be it noted, before 30th June 1949)could not condone the earlier “ blunder ” which (in the learned judge'sview) was irretrievable.
The learned judge concedes that “ in view of tiiis subsequent paymentit may appear to be somewhat technical to hold that in point of fact,there was a breach of the contract ”. Apart from attracting commentus to its extreme technicality, this part of the judgment also invitesthe more serious criticism that it suggests a wrong answer to a questionwhich waf not raised by either litigant at the trial.
As I have previously pointed out, the Company still remained liable,after the contract had been terminated by due notice, to pay to therespondent her remuneration for June 1949 on or before 30th June ;and this obligation was fully discharged long prior to the due date.No suggestion of any so-called “repudiation in advance’’ was madein the pleadings. Nor was it specifically put in issue or raised' in thecourse of the appellant’s cross-examination. Even the recorded summaryof the closing addresses of the respondent’s lawyer makes no mentionof it. In the result, the appellant had no opportunity at the trial ofnfeeting an argument (based on unascertained facts) which emergedfor the first time in the judgment under appeal. I reject this admitted“ technicality ” as having no bearing on the issues which were framedin the Court below.
The only ground specified in the respondent’s evidence to support herallegation that the Company had wrongfully terminated her employmentwas that, under the terms of PI, the clause providing for “ one month’snotice ” applied only if her work or conduct proved unsatisfactory.This interpretation was, of course,. quite untenable, and was rightlyrejected by the learned judge. In the result, he should have held thatthe respondent’s cause of action was without foundation.
But let us assume that the Company had committed some technicalbreach of the contract. Even on that hypothesis, the second elementif the eau«e of action had still to be established before the appellant’sliability in delict could arise.
The Company is incorporated in England, and udmittedly the appellantwas the officer entrusted with the function of employing, and terminatingthe employment of, the Company’s minor employees (including therespondent) in Ceylon. How then is it suggested that, in exercisingtiis delegated authority to terminate the respondent’s services, he had"induced”, “procured” or “caused” the Company to do what inreulity he, and he alone, had done ?
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QRATIAEN J.—Barren «. AUendorfl
The essence of thiB particular category of actionable wrong is thatdamage hag resulted from unjustifiable interference by an intermeddlerwho has induced or procured a breach by one of the contracting parties.Under the Roman-Dutch law, “ every contract imposes a duty uponpersons extraneous thereto not to interfere with its due performance,and a breach of this duty gives rise to an action for damages ”—Isaacmanv. MillerSimilarly, in England, McCardie J. pointed out that “ inevery one of the sets of circumstances before the Courts, the personwho procured the breach of contract was in fact a stranger—that is, athird person who stood outside the area of the bargain between the twocontracting parties ”—Said v. Butt 2.
An agent or servant who, acting within the scope of his authority orin the exercise of his delegated powers, terminates a contract on behalfof his principal or master, does not stand “ wholly outside the area ofthe bargain ” : on the contrary, he is, by virtue of his own appointment,made directly responsible for its due performance or for its termination(as the case may be). He cannot therefore be fixed with personalliability for any damage resulting to the other contracting party. AsMcCardie J. explains in Said v. Butt {supra) “he is not a stranger. Heis the alter ego of his master. His acts are in law the acts of his employer.In such a case it is the master himself, by his agent, breaking the con-tract he has made, and an action against the agent under the Lumleyv. Qye principle must therefore fail, just as it would fail if broughtagainst the master himself for wrongfully procuring a breach of hit owncontract ”. These observations were approved by the Judges whoheard Scammel Ltd. v. Hurley3 and, aa far as I am aware, have neverbeen dissented from since.
The learned Die trie t Judge acknowledges this difficulty, but seeksa solution in an interesting theory of “ split personality ” : namely,that the appellant (in the role of “ plain Mr. Barrett ”) had inducedhimself (“ the District Manager of the Dunlop Rubber Co. Ltd.”) toterminate the contract with Mrs. Altendorff. There is really nojustification for such sophistry in applying the true legal principleto the facts of this particular case. It was very clearly understood bythe respondent that all matters affecting the performance or terminationof the contract should be dealt with (as far as the Company was con-cerned) by the manager, for the time being, of its branch office in Ceylon.In other words, the appellant was the Cdinpany’s alter ego when heterminated the contract.
The matter can perhaps be looked at in another way. Even if it becorrect to state that the appellant’s actions did constitute an “ inter-ference” for the purposes of one element of the . cause of action, thejustification ” for what he did is found in his delegated authority torepresent the Company in the matter. There seems to have been someconfusion in the judgment under appeal as to what precisely called forjustification aB a defence to the action. The true position is (assuming *
* (1920) 3 K. B. 497 ai 506.
* (929) 1 K. B. 419, O. A.
* (1922) T. P. D. 66 at 66.
• PUL.LE J.—In re Hoar Jehan
20
the other elements of the cause of action to be established) that theappellant was required only to justify his so-called interference andnot to justify the breach itself.
In my opinion the respondent has failed to establish her cause ofaction against the appellant. Far too much time was taken up in thelower Court in an attempt to probe irrelevant matters—for example,whether there was “ moral justification ” for the decision to terminatethe contract, and whether any underlying motives existed for selectinga particular stenographer to take the respondent’s place after herservices had been dispensed with. All these are matters with which,in the present state of the law, the Court was in no way concerned.Provided that a man fulfils his contractual obligations with the personsconcerned, he is protected from judicial speculation as to why preciselyhe chose to terminate the services of one personal stenographer andpreferred to engage the services of another.
would allow the appeal and dismiss the respondent’s action withcostB in both Courts.
Fernando A.J.—I agree.
Appeal allowed.