Marcan Shipping (London) Ltd v Polish Steamship Company (Manifest Lipkowy)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MAY,LORD JUSTICE RALPH GIBSON,LORD JUSTICE BINGHAM |
| Judgment Date | 08 February 1989 |
| Judgment citation (vLex) | [1989] EWCA Civ J0208-7 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 February 1989 |
| Docket Number | 89/0268 |
[1989] EWCA Civ J0208-7
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr. Justice Evans)
Royal Courts of Justice
Lord Justice May
Lord Justice Ralph Gibson
and
Lord Justice Bingham
89/0268
MR. B. EDER (instructed by Messrs Zaiwalla & Co.) appeared on behalf of the Appellant/Plaintiff.
MR. D. KENDRICK (instructed by Messrs Elborne Mitchell) appeared on behalf of the Respondent/Defendant.
This is an appeal from a decision of Evans J. on 17th December 1987 dismissing the appellant plaintiffs' claim for damages for an alleged breach of an alleged implied term in a contract between the appellants and the respondents, ancillary to a contract for the sale and purchase of a ship concluded between the appellants' principals on the one hand and the respondents on the other hand, but which was later cancelled.
The facts can be stated shortly. A Mr. Yamvrias, who was and is a director of the appellant company, is by profession a shipbroker. In 1982 he negotiated a sale of the M.V. "Manifest Lipkowy" by the defendants, the respondents to the present appeal, to Greek interests headed by a Mr. Kefalas. The memorandum of agreement was in common form. It was dated 20th April 1982. It is unnecessary to refer to much of it, save first to clause 18, which provided:
"The vessel to be delivered safely afloat at a safe berth in a UK/Continental/Mediterranean Port in Sellers option, Vessel to be delivered during May/June with 15th May earliest with 30th June 1982 cancelling in Buyers option."
Then in clause 16 the last sentence is material and it read:
"Commission in full to be deducted from purchase price at time of payment and to be credited to Buyers Brokers Account/Marcan Shipping/London/Limited, London/ for division. It is agreed that 0.5 per cent of the commission to be paid to GAL—London."
At the same time Mr. Yamvrias concluded what I have referred to as a collateral contract with the respondent steamship company. It was in fact dated the following day, the 21st April. It merits reading in full:
"Reference: 'MANIFEST LIPCOWY'
It is hereby mutually agreed between Polish Steamship Company and Marcan Shipping/London/Ltd. that on the agreed (per M.O.A. dated 20.04.1982) purchase price of US Dlrs. 5,829,000 a total commission of 4.50 percent namely US$ 262,305 / United States Dollars,….. shall be deducted from the purchase price and be paid to the following account:
MR. DIMITRIOUS N. YAMVRIAS,
US$ Account No.…..NATIONAL BANK OF GREECE
…..Rotterdam Holland.
…
It is also agreed that out of the total commission 0.50 per cent namely US$ 2 9,145 shall be paid to Messrs Gdynia America Lines, London.
To comply with the above agreement, we hereby also authorise Buyers Bank Continental Illinois Bank Ltd. London before payment to [P.S.C.] to deduct the above amount of US$ 262,305 and transfer the same as per Instructions contained herein."
The only further fact that needs mentioning is that the ship was not delivered by 30th June 1982 and accordingly, as he was entitled under the memorandum of agreement, the buyer cancelled.
In cases where an agent is employed to bring together a potential seller and a potential buyer so that a binding contract of sale, or a sale itself may be effected, such as, for instance, the shipbroker in the instant case, or estate agents in another well-known field, it is quite usual to provide in the contract of employment of the agent that if he is successful in achieving the object for which he is employed, then he will be paid substantial remuneration. In some circumstances, to some people, it may appear that the remuneration provided for is excesive. Be that as it may, the other side of the coin is that if the agent's work is not successful and does not achieve a binding sale, then even if he has done a great amount of work, brought the parties within inches perhaps of a binding agreement, if the transaction falls through the agent receives no remuneration at all.
In such a case, where the agent is employed by only one of the potential contracting parties, it is well established that there will be implied into the agent's contract of employment a term to the effect that when the agent has achieved that which he was employed to do and upon the achievement of which his entitlement to remuneration depends, his principal will not fail to perform the arranged contract with the third party, arranged by the agent, so as to deprive that agent of the remuneration due to him under the agency contract. Authorities to this effect go back a long time. At one stage they were principally concerned with the rights of estate agents introducing purchasers for property, but if reference is needed to a recent authority it can be found in Alpha Trading v. Dunnshaw [1981] Q.B.290. I do not specifically quote from the judgments but there are brief passages in the judgment of Brandon L.J. at page 304E and Templeman L.J. at page 397G supporting the principle. Lawton L.J. agreed with both judgments in the case and indeed himself at page 308 expressed very much the same opinion.
In the instant case Mr. Yamvrias, as the learned judge found, well knew that in his shipbroking world commission was not payable until the purchase price of the ship had been paid and the ship delivered; that is to say until the contract for sale and purchase had been completed. Consequently, in the instant case, he was in no position to claim remuneration as such from his buyer employers directly. Further, for reasons into which I think it is unnecessary to go, at least in the court below he did not claim his commission direct from the sellers. It is important to bear in mind that the claim before the learned judge below was not run on those lines at all. It was run on the basis that I have already indicated of a breach of an implied term in the collateral contract.
However, at the opening of this appeal before us, Mr. Eder, on the appellants' behalf, sought leave to amend the notice of appeal to add an alternative argument and claim that the appellants were in law entitled to their commission direct from the sellers in the instant case. That application was opposed.
In support of his application Mr. Eder modestly pointed out that the application arose as a result of a new mind acting upon the existing problem. It was a pure question of law that he sought to raise. The objection that the cause of action arose technically outside the relevant limitation period was not conclusive because the writ had already been issued. He submitted that were he to be allowed to amend as he sought, no prejudice would be caused to the respondents. He pointed out that it was a matter entirely for our discretion.
In opposition to the application to amend Mr. Kendrick submitted that the proposed amendment sought to put forward a completely new unpleaded cause of action which indeed was inconsistent with the case up to that time, as I have already pointed out. There were further reasons why the court in its discretion should not allow leave to amend. First, because during the trial below one of the witnesses in the course of his evidence suggested that as a matter of construction of the memorandum agreement of 20th April commission became due to the broker when the contract was made. The learned judge, it is not disputed, then pointed out to leading counsel for the plaintiffs that that raised a wholly different legal case from that pleaded and asked if counsel wished to apply to amend the points of claim. That question was considered by counsel with Mr. Yamvrias and his solicitor overnight and on the following day the learned judge was expressly told that the plaintiffs did not wish to amend their claim to present their case on that alternative basis. Consequently, Mr. Kendrick submitted, this was not one of those cases of accidental omission, but a specific tactical decision was taken below on how this case should be run on appeal. Indeed, submitted Mr. Kendrick, not only was the point not run in the court below, but the very contrary was argued. He referred to the skeleton final submissions put forward by leading counsel for the plaintiffs below. He quoted their terms. I do not need to quote them in the course of this judgment. It is quite clear that what was being argued was to the contrary of the purport of the amendment for which our leave was sought. It was also pointed out that the new case, if an amendment were allowed, was inconsistent with affidavit evidence that Mr. Yamvrias had given at the interlocutory stages. In the Points of Defence in paragraph 5.2 it was pleaded that by the express terms of the collateral contract of 21st April and/or by the Memorandum of Agreement of 20th April monies only became payable to the plaintiffs upon payment of the purchase price. Mr. Yamvrias, in an affidavit in support of Order 14 proceedings, swore in these terms:
"I agree that the effect of the document of 21st April was as pleaded by the defendants. That is why the plaintiffs have not in this action claimed commission as such for damages for being deprived of their commision."
True that may have been an affidavit sworn at an early stage of the case when perhaps full investigations had not been made, but nevertheless it quite clearly would have invited stringent cross-examination had the case been run below on the alternative basis, cross-examination which was unnecessary and not pursued when the decision was taken before the learned judge not to seek leave to amend. In...
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