CASE BRIEF

MOGUL STEAMSHIP CO. v McGREGOR, GOW & CO (1892) A.C. 25

From: Anirudh Arora BA LLB(H), 1st Year Jamia Milia Islamia

Citation.
23 Q.B.D. 598 (1889), affirmed [1892] A.C. 25.

Facts
A group of ship owners formed an association to raise their profits. The association agreed to limit the number of ships sent by the association to different ports, to give a 5% rebate on freights to all shippers of stock who dealt only with members, and that agents of members would be prohibited from dealing with anyone in the association if they did not deal exclusively with people in the association. If any member wished to withdraw, they would have to give notice. Mogul Steamship Co Ltd had been excluded. When it sent ships to the loading port to pick up cargo, the association sent more ships and underbid Mogul Steamship Co Ltd. The association also threatened to dismiss agents or withdraw rebates from anyone who dealt with Mogul Steamship Co Ltd. Mogul Steamship Co Ltd alleged there was a conspiracy to injure its economic interests and sued for compensation.

Principle
Damnum Sine Inuria. It is a Latin term literally meaning condemnation without injury. Simply translated, the term would mean injury with no damages. Damnum sine injuria refers to a legal situation in which plaintiffs right is not respected by another but where the breach of plaintiffs right does not cause damage, or at least not a calculable or admissible damage. A finding of damnum sine injuria can be the basis for a finding of nominal damages.

Issue

Is there a cause of action for unfair competition when that competition complained of consists of a price confederation that wants to control shipping of goods by lowering prices?

Judgement
No. "Competition, however severe...if unattended by circumstances of dishonesty, intimidation, molestation, or such illegalities...gives rise to no cause of action." The House of Lords, affirming the Court of Appeal's decision, held that the acts were done with a lawful object of protecting and increasing the associations profits. Because no unlawful means had been employed, Mogul Steamship Co Ltd had no cause of action. The court reasoned that the self-interest of promoting one's own business was not unlawful. Neither was banding together to dominate the market. The competition in this case was not fraudulent. Although it was designed necessarily to damage the plaintiff's business, it was not illegal. Intentionally to do that which is calculated in the ordinary course of events to damage, and which does, in fact, damage another in that other persons property or trade, is actionable if done without just cause or excuse. The acts of Defendants, which are complained of here, were intentional and were also calculated to do Plaintiffs damage in their trade. But in order to see whether they were wrongful depends whether or not they were done without just cause of excuse. * Defendants have done nothing more against Plaintiffs than pursue to the bitter end a war o competition waged in the interest of their own trade. There is no authority for the doctrine that such a commercial motive deprives of just cause or excuse acts done in the course of trade which would but for such a motive be justifiable. To say that a man is to trade freely, but that he is to stop at any act which is calculated to harm other tradesmen, and which

is designed to attract business to his own shop, would be a strange and impossible counsel of perfection. Competition, however severe and egotistical, if unattended by circumstances of dishonesty, intimidation, molestation, or such illegalities gives rise to no cause of action at common law.

Case Brief
In this case, a number of steamship companies combined together and drove the plaintiff company out of the tea-carrying trade by offering reduced freight. The House of Lords held that the plaintiff had no cause of action as the defendants had by lawful means acted to protect and extend their trade and increase their profits.

Other Examples
Ushaben v Bhagyalaxmi Chitra Mandir Chesmore v Richards Gloucester Grammar School Case Bhim Singh v State of J & K