Les Affreteurs Reunis v Leopold

Les Affréteurs Réunis Société Anonyme v Leopold Walford (London) [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 charters. Walford charged a 3% commission which was specified in the charterparty contract which was agreed to in 1916 and was a continuation of an early agreement on similar terms. In 1917, after Les Affreteurs’ ship was recommissioned, the charterparty expired. Les Affreteurs refused to pay Walford’s commission, holding that commission was only payable in respect of hire duly earned under the charterparty.

Issues:

Whether Walford could claim commission from the contract which had expired and after the ship was recommissioned.

Held:

The appeal by Les Affreteurs was dismissed. Les Affreteurs were found have been relying on custom, in that the brokerage was payable only out of the hire as earned. The French agreement was held to be incorporated in the charterparty and thus, the agreements were not separate and to be read and interpreted as one. The charterparty contract between the owners and the charters was relevant to the brokers (which had also long been custom). The case of Harley & Co v Nagata (1917) 23 Com Cas 121, was applied. Charters were entitled to bring action as trustees of the brokers where they were directly party to the contract. Therefore, allowing a third party to sue for an entitled commission.