Gunns Ltd: legitimate protest or economic sabotage?

Many of the green activists and politicians being sued by forestry company, Gunns Ltd, in the Supreme Court of Victoria have claimed that the action is an assault on free speech. That claim is an attack upon the integrity of the Supreme Court and Australia's legal processes. If the Greens and their supporters are confident that their campaign against Gunns has been conducted lawfully, they should welcome the opportunity to try the facts before an impartial tribunal.

The activists who have reason to worry are those for whom the campaign against Gunns has ceased to be a legitimate attempt to advance the environmental cause and has instead assumed the character of blind, almost pathological, hatred for Gunns and for corporations in general.

Green activists come in many hues but it is this type of activist - the same as those who lobbed bricks through Starbucks' windows in Seattle - who are themselves trampling upon the rights of others in the community.

Australians thankfully have every right to express their views about environmental policy but the limit of the right to free expression is where it starts to impinge on the rights of others. Just as anti-vilification legislation limits free speech to protect the rights of minorities, tort law promotes the smooth exchange of land, goods and services by protecting the rights of Australians to hold property and to engage in commercial exchange mediated by contracts.

Since at least the mid-19th century, free market countries have sought to deter malicious interference with an individual or company's economic interests by imposing civil liability upon those whose actions cause financial loss. Aside from the claims of trespass to land, damage to goods and corporate defamation, Gunns' writ alleges a number of wrongful acts that may be grouped together under the heading of intentional infliction of economic loss.

Of the civil actions available under that heading, some have become largely obsolete after the passage of trade practices legislation.

Those remaining, the three torts of interference with contract, intimidation and conspiracy, are most frequently invoked in industrial disputes, where extensive statutory enactments affect the law. However, in other cases of economic loss, where the common law may be a useful last resort, disputes may be regulated by precedent established by the courts in fulfilling their function in a sophisticated market economy.

From an evidentiary perspective, the first two of these actions are easier to try. Interference with contract requires that there be either hindrance of a contracting party's performance of its obligations by physical means or by persuasion; or indirect disablement, such as that involved when activists commit unlawful acts in the course of a secondary boycott of a company's products. Similarly, intimidation requires that an activist threaten a third party with an unlawful act, such as inducing a breach of contract, coupled with a demand that the third party company with an activist's request, such as boycotting a product.

However, the broadest cause of action is that of conspiracy. This is because unlike its sister torts, conspiracy penalises acts by a combination of people, which if they were carried out by a single person, would not be unlawful. Because legitimate competition involves acts calculated, in part, to cause economic harm to a business competitor, the potentially broad ambit of this tort must be defined narrowly by reference to a stringent test.

In Australia, that test is expressed as requiring that the motive or ultimate object, rather than the immediate purpose, of the conspirators was to inflict economic loss or that the conspirators were actuated by "disinterested malice". Those words are not, as some green activists might guess, those of a union-busting, conservative judge. To the contrary, the test was expressed by H V Evatt, perhaps the judge most favourably inclined towards organised labour in Australian history.

If the conspirators can show that economic injury to a company is merely a necessary by-product of advancing a political, social or religious objective, they will be successful in resisting a claim. Justice Evatt's lesson is that when, for instance, green activists lose sight of their policy agenda and maliciously pursue a visceral hatred for a corporation, that is where Australian society draws the line between legitimate and unlawful behaviour.

Some Tasmanian activists of that variety often forget that the interests in a corporation are far greater than the sensationally controversial pay-packets of its chief executive or directors. In a modern economy, the interests of many ordinary Tasmanians, through employment and through the institutional shareholdings of superannuation funds, are linked to Gunns' financial performance.

Though Gunns' case in the Supreme Court will face evidentiary difficulties in proving any claim of conspiracy to injure, it should serve as a reminder of the boundary drawn between legitimate protest and malicious, economic sabotage.