What is the test of intention, justification and the defence of justification in the context of a breach of contract?

New Brunswick, Canada


The following excerpt is from SAR Petroleum et al. v. Peace Hills Trust Company, 2010 NBCA 22 (CanLII):

The appellants object to the above framework in one respect. They insist that the requisite intention is established once the plaintiff shows that the defendant knew that it was inducing a breach of contract (element 5) and, therefore, the defendant cannot escape liability unless it establishes the defence of justification (element 8). I agree that prior to OBG Limited v. Allan some courts adopted that position. On the other hand, the validity of the objection may be more illusory than real for this reason. In cases where the plaintiff established that the defendant knew that it actions would result in the third party breaching the contract with the plaintiff, invariably the defendant would seek to justify its actions by showing it acted for a proper purpose: to protect its legitimate and existing contractual or proprietary rights. However, if the defendant has already established that it did not act for an improper purpose, that is to say did act out of malice or opportunistically, then it should follow that it must have acted for a proper purpose (to protect its existing contractual rights). In short, there is an apparent overlap when it comes to the defence of justification and the test of intention. The matter is discussed below. A. Elements (1) to (4)

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