Lonrho v Fayed

Lonrho v Fayed [1990] 2 QB 479

Tort – Cause of action – Unlawful interference with business – Injury to business – Damages

Facts:

Lonrho were acquiring a company, and were awaiting permission from the Monopolies and Mergers Commission. Fayed and three other defendants made a rival bid for the entire share capital of the company, through the medium of the fourth defendant. The offer was approved and the defendants gained control of the company, although the offer was not put to the Commission to consider. Lonrho issued a writ, claiming the defendants had made false statements about their financial capacity leading to their bid being approved and that the defendants had tortiously interfered with the plaintiff’s right to bid for the shares and or conspired against Lonrho, causing loss.

Issues:

Whether Lonrho suffered injury by a third-party interference, and whether the injury was actual loss or hypothetical loss.

Held:

Allowing the appeal, there was no requirement for the tort of interfering with business, for the defendant’s predominant purpose to consist of injuring Lonrho. It was enough to determine that Fayed had acted to further his own interests. Further, Fayed was proven to have acted fraudulently for the purposes of interfering with the pending purchase agreement between the company and Lonrho. When fraud is present, there does not have to be a complete tort against the third party to the extent that Lonrho suffered injury or damage. It was enough to show the act was fraudulent. The limits of the tort had not yet been established and the process of refining the law should be carried out only on the facts presented, rather than any hypothetical cause of loss. Loss could be clearly identified on the facts. Lonrho were entitled to damages.