Les Affréteurs Réunis Société Anonyme v Leopold Walford (London) Ltd [1919] AC 801
Contract – Ship – Charterparty – Chartering Broker’s Commission
Facts:
Leopold Walford (Walford) acted as brokers for a charterparty. Les Affreteurs were owners of a ship. A time charterparty was effected between the shipowners and the Lubricating and Fuel Oils Company as charterers. The 1916 charterparty continued an earlier agreement and expressly made a 3% commission on estimated gross hire payable to Walford on signing, whether the ship was lost or not. In January 1917 the French Government requisitioned the ship before service began under the new charterparty, so no hire was earned under it. Les Affreteurs refused to pay Walford’s commission, holding that commission was only payable in respect of hire duly earned under the charterparty.
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Issues:
Whether a trade custom making commission dependent on hire being earned could override the express clause, and how Walford could enforce the promise despite not being a party to the charterparty.
Held:
The appeal by Les Affreteurs was dismissed. The commission clause made payment due on signing. A custom postponing payment until hire was earned could not prevail because it contradicted those express terms.
The House of Lords approved Robertson v Wait (1853) 8 Ex 299: the charterers could sue as trustees on behalf of the brokers. This was not a general right for any third-party beneficiary to sue directly. The owners had agreed to raise no objection about the parties, and the action was treated as if the charterers had been added as claimants. The trial judge’s reliance on the custom established in Harley & Co v Nagata did not defeat the express commission clause.
Sources: Original report, [1919] AC 801; Lord Birkenhead’s judgment passage reproduced in Nisshin Shipping v Cleaves [2003] EWHC 2602 (Comm).
