Moran Yacht & Ship Inc v Pisarev & Anor Re 4YOU

A broker earns commission only where the agency agreement, properly construed, entitles it to remuneration and the broker was the effective cause of the transaction. An introductory act need not be the immediate cause, but there must be a sufficient connection between that act and the eventual sale. A brief and non-serious inspection, followed by a lengthy period without contact and a later independently negotiated transaction, may be insufficient. An alleged instruction to market property must be proved on the evidence; discussion of a possible future sale does not itself amount to an instruction.

Moran Yacht & Ship Inc, a yacht broker, claimed commission from Galaxias Maritime Ltd in respect of the sale of the yacht “4YOU” to a company associated with Alexander Miliavsky. It also claimed that Kirill Pisarev, Galaxias’s ultimate beneficial owner, was personally liable for inducing breach of contract.

The central issues were whether Pisarev instructed Moran to market the yacht at a meeting on 11 May 2010, whether Moran was an effective cause of the eventual sale, what commission would have been reasonable, and whether Galaxias had breached any obligation to pay commission.

1. The claim was dismissed. No express or implied agreement was established under which Moran was entitled to commission for the sale.
2. The discussion at the 11 May 2010 meeting concerned the possible future sale of the yacht if Pisarev proceeded with the purchase of a new yacht. It did not amount to an instruction to market “4YOU”. The surrounding evidence, including the absence of a contemporary record, the later contractual provision that the yacht would be marketed after the summer, and the preliminary stage of the new-yacht negotiations, supported that conclusion.
3. Even if Moran had been instructed to market the yacht, it was not the effective cause of the eventual sale. Applying the approach stated in Nahum v Royal Holloway and Bedford New College [1999] EMLR 252, the question was whether Moran’s actions really brought about the relationship of buyer and seller. The May 2010 visit was brief and non-serious. There was no relevant contact thereafter, the purchaser’s financial circumstances and intentions later changed, and the eventual sale followed fresh discussions between the purchaser and Pisarev and an independent inspection.
4. It was therefore unnecessary to determine the contractual commission rate. The judge observed that, had it been necessary, 4 per cent of the €19.8 million sale price would have been fair and reasonable.
5. The claim against Pisarev for inducing breach of contract did not arise because Galaxias was not in breach. The judge nevertheless observed, with reference to OBG Ltd v Allan [2007] UKHL 21 and [2008] 1 AC 1, that treating a beneficial owner as liable merely because a company failed to make a payment could significantly undermine limited liability.