Case Briefing | The Bayrupert Case
F. W. Chambers & Co Limited
Ardrossan Dry Dock &
Shipbrokers — Commission — Alleged introduction of business to shipbuilding company—Failure of pursuer to satisfy onus of proving (1) that service was rendered under express or implied contract of employment; (2) that service rendered was the efficient cause of resulting business — Judgment for defenders.
In this case Messrs. F. W. Chambers & Co., Ltd., 16, St. Helen’s Place, London, claimed from the Ardrossan Dry Dock & Shipbuilding Company, Ltd., Ardrossan, £1800 in respect of commission on the construction by the Ardrossan Company of the steamship Bayrupert to the order of the Hudson Bay Company.
The facts are sufficiently set out in the judgment.
Counsel for Messrs. F. W. Chambers Co., Ltd. Mr. W. G. Normand, K.C., and Mr. R. H Maconochie (agents, Messrs. Forbes, Dallas k Co., W.S.); Counsel for the Ardrossan (Dry Dock & Shipbuilding Company: Mr. John Carmont, K.C., and Mr. T. M. Cooper (agents, Messrs. Webster, Will & Co., W.S., Edinburgh, and Messrs. Wright, Johnston & Mackenzie, writers, Glasgow).
Lord Murray assoilzied the defenders from the conclusion of the summons, and found them entitled to expenses.
Lord MURRAY: This is an action at the instance of a limited company carrying on business as shipbrokers and commission agents in London. The witness Chambers and his wife are the only shareholders of the company, and I shall accordingly refer to Chambers as “the pursuer.”
The defenders are a firm of shipbuilders at Ardrossan, who, in 1925, built the steamship afterwards called the Bayrupert to the order of the Hudson Bay Company (here in after referred to as the company).
The pursuer claims to be entitled to payment of commission from the defenders in respect that he introduced this business. The amount of commission claimed in the summons is £1800, being at the rate of one percent, on the contract price of the ship, which was alleged by the pursuer to be £180,000. It appeared in the proof, however, that the price was truly £140,000, and the pursuer’s Counsel accordingly restricted his claims to the sum of £1400.
On the law which governs a broker’s right to commission I had a full citation of authority. It İs, however, unnecessary to examine the cases in detail, for they are in the main merely illustrative of a proposition, which was not in dispute between parties, viz., that a broker is entitled to payment of commission if his Services result in an effective introduction of business. But to found such right to commission at least two conditions must be satisfied: (1) that the service rendered is rendered under a contract of employment by the principal, which contract may be express or merely implied by acceptance of the service; and (2) that the service rendered is in fact an efficient cause of the resulting business. It need not be the sole cause; it is enough that it materially contributes to the business secured. (Burchell v. Gowrie and Blockhouse Collieries,  A.C. 614.)
The decision in the present case turns upon the question of fact whether the Services of the pursuer, upon which he founds, were an efficient cause of the contract for the building of the Bayrupert. In my judgment the pursuer has, upon the evidence, failed to establish this.
The proof which has been led is long and involved a close examination of a considerable correspondence, and upon several issues in fact the testimony adduced hine inde is in such direct conflict as to raise sharply questions of credibility
The history of the case may be shortly resumed. In the beginning of 1922, the defenders of which company the witness Mr. Quack was then and continued until 1925 to be managing director, had a ship under construction. Among other brokers who had particulars of the ship with a view to finding a purchaser was the firm of Messrs. Turner, Davidson k Co., and they got into touch, among others, with the Hudson Bay Company. This company is administered in London by a governor and deputy governor and a committee. The then deputy governor was a Mr. Sale, who, however, was not called as a witness on either side. The company owned two or three ship for the purposes of their trade and were proposing to increase their tonnage. But at this time, they also owned or managed a fleet of steamers formerly flying the French flag, which had been turned over to the company during the var. This fleet, however, at the time in question was either sold or in course of realization. The company’s marine super intendent or “head of steamer department” was a certain Mr. Thomson, who also managed the French fleet, his assistant latterly being the witness Captain Walker. Mr. Thomson appears to have had a certain authority not only in regard to the management of the foreign ship but in regard to the proposed new tonnage, and, in January, 1922, Messrs. Turner, Davidson & Co., introduced Mr. Quack to Mr. Thomson and his assistant, Captain Walker, at the company’s Office, where Mr. Quack also met and discussed the business with Mr. Sale. The parties, however, did not succeed in coming to terms, and Messrs. Turner, Davidson k Co., subsequently reported to Mr. Quack that the business was off.
A month or two later another firm of brokers, Messrs. Kilgour, who were alto pushing an order for the ship on the defenders’ account, mentioned the matter to the pursuer. At this stage he knew nothing of the company and had done no business with or for them. Mr. Thomson had, however, mentioned to the witness Mr. Allan, an engineer, who was then doing some casual broking business, that the company were in the market for new tonnage, and this information Mr. Allan, who was a friend of the pursuer’s, passed on to him. The pursuer saw Mr. Thomson, who asked him to get a firm offer of the vessel at a figure. This Messrs. Kilgour obtained from Mr. Quack at the pursuer’s request, and at the same time arranged for Mr. Quack to go to London. Mr. Quack accordingly, in March, 1922, returned to London and was introduced by Messrs. Kilgour to the pursuer, who in turn took Mr, Quack to the Hudson Bay Company, where Mr. Quack was again introduced to Mr. Thomson. This time business did result, and before Mr. Quack left London a contract was arranged between ı the company and Mr. Quack which finally fixed up at an interview or interviews had between Mr. Quack and Mr. Sale. The pursuer had meantime arranged with Mr. Quack that if business resulted, he should obtain a commission’ of three per cent, on the contract price; this upon the plea that in addition to Messrs. Kilgour the commission had to cover a third broker, the witness Mr. Allan’, to the extent of one per cent. This commission of three per cent. was ultimately paid by the defenders to Messrs. Kilgour, who handed over two per cent, to the pursuer. Of this the pursuer pocketed one and a half per cent., giving Mr. Allan a half per cent, only notwithstanding his representation to Mr. Quack. Mr. Allan stated that his discovery of this at a later stage led to some estrangement between himself and the pursuer.
It is not disputed but that the pursuer was thus an efficient cause in setting up effective business results between the defenders and the company. Mr. Quack was admittedly impressed by the success of the pursuer’s introduction, and from April, 1922, onwards with however a notable break from September, 1922, to December, 1924, the pursuer undoubtedly did busy himself in various directions on behalf of the defenders. Relations between the defenders and the pursuer were such that if any business had resulted commission would, I think, have been earned ‘by the pursuer.
I need not resume the various business propositions which were discussed from time to time between the pursuer and the defenders, for none came to fruition, unless, indeed, it be the case in hand, the building of the Bayrupert.
It only remains to be noted in this connection that the contract for the first ship, which was called the Bayeskimo, was duly completed by the defenders; that the vessel underwent her trial in mid-June, 1922, and gave satisfaction to all parties concerned; as also that at this time the vitness Captain Walker, who had meantime succeeded Mr. Thomson in the company’s service, visited Ardrossan accompanied by a Mr. McLaren, the Consulting engineer of the company. Mr. McLaren, who was not called as a witness, was the adviser of the company in all technical matters concerning the building of new ships or the repair of existing ships of the company.
In the interval, on or about May 30,1922, the pursuer had written to Mr. Quack to the effect that the company were contemplating building further new tonnage, the vessel to be on the lines of one of the company’s boats, the steamship Nascopie, and also that he would forward plans of the latter vessel in a few days. This letter is couched in terms of expectation, not in terms of any definite business proposition. The plans (which purported to, be the general arrangement and the midship section of the Nascopie) were sent forward by the pursuer to Mr. Quack on June 6, 1922, and were accompanied by a specification of the vessel. These the pursuer represented he had obtained from the “owners of the Nascopie.”
The pursuer’s present claim rests upon these two factors: (a) that he Bent forward these documents and, in this sense, introduced the business of the Bayrupert, and (b) that from time to time thereafter he kept Mr. Quack posted as to the progress of the proposition. These Services, he maintains, were the efficient cause of the order for the Bayrupert being placed with the defenders’ company. In my opinion he failed to establish that his introduction in any way induced the Bayrupert contract or influenced the decision of the company to place the order with the defenders.
In the first place my conclusion upon the evidence is that in May-June, 1922, there was no such business to introduce. The evidence of the company’s London manager, Mr. Stirling, who was appointed as such in May, 1923, as also of Captain, Walker, who was called as a witness for the defence, is that the company’s decision to increase their tonnage only took shape more than two years later, and not earlier at least than the end of 1924. In point of fact the plans for the new boat with the necessary specification, which were the work of Mr. McLaren, were not prepared until shortly before the specification was issued to the firms invited to tender, which was towards the end of February, 1925. Further, the Bayrupert in its construction and design gave effect to certain information .in regard to Arctic ice conditions and the like upon which the company sent out Captain Walker to report in May, 11924, and the latter only returned to this country and reported in November, 1924. It is also admitted on all hands that the Bayrupert as built differs in all material respects from the Nascopie, and that the plans and specifications of the latter could afford no guidance to a shipbuilder in constructing the former vessel.
Again, even assuming that the company had determined upon building new tonnage in May-June, 1922, the information which the pursuer forwarded would, in my opinion, in order to be effective for its purpose, have required to be authoritative, and to have reflected the intentions of the company or of those authorised to represent it. The pursuer admits that he had no access to any of the company’s officials other than Captain Walker, and that the latter was the sole source of his information. Captain Walker himself depone that he had no authority to represent the company in any such matter as approaching shipbuilders or ‘brokers in regard to new tonnage, and I accept his testimony. He was superintendent of stores and as such charged with the equipment of the company’s three or four ships, but beyond this there is no evidence that the company ever gave him any antecedent authority to act on their behalf or ratified his actions. Mr. Stirling’s evidence is negative of any such view. Indeed, the pursuer’s case on this head rests solely upon an ‘inference which is derived from the fact that Captain Walker succeeded Mr. Thomson and, therefore, it is argued, must be pre-used to have inherited all such authority as Mr. Thomson himself possessed. This is not convincing. Mr. Thomson certainly does appear to have been armed with wider powers than that of a mere superintendent of stores and to have played an important part in the matter of the Bayeskimo. But Mr. Thomson was also charged with the general management at least of the fleet of steamships. That Captain Walker may have been a trusted servant of the company with some marine experience or even that he was consulted upon such matters as passenger accommodation or Arctic weather conditions is nothing to the point. He had neither knowledge of nor technical skill in plans or specifications. All this was in the handle of Mr. McLaren who worked to the instructions of Mr. Sale, and, «o far as appears, the pursuer never met either Mr. Sale or Mr. McLaren. I have no doubt that the pursuer cultivated Mr. Walker for business reasons, in the hope of earning further commissions, and that he got out of Captain Walker as much information as the latter was able or willing to part with; neither do I doubt that the pursuer, in his correspondence with Mr. Quack, and in his interviews with him, which were quite frequent, sought to convey the impression that his information in regard to the company and their intentions was intimate, early and exclusive. He certainly did expend considerable time and trouble over this and many other items in relation to Mr. Quack’s and the defenders’ business interests, and I think it may be taken that he did not do this out of friendship but with a view to business. In regard to the company’s affairs, however, my view is that the information he passed on to Mr. Quack was little more than gossip (albeit business gossip) gleaned from his talks with Captain Walker. And it may well be that even as early as May- June, 1922, there may have been some loose talk between the pursuer and Captain Walker with regard to the probability of the company increasing their tonnage at some future date.
I may add that on and after May-June, 1922, there was little or no room for any further introduction of the company to the defenders. For in that month both Mr. McLaren and Captain Walker visited Ardrossan in connection with the completion and the fitting out of the Bayeskimo, and thereafter Mr. Quack and Mr. McLaren were in direct and close touch. The company were well satisfied with the defenders’ work, and as the result of Mr. McLaren’s visit the defenders in fact obtained thereafter the whole drydocking and repair work of the company’s ships, amounting in value to some thousands of pounds per annum. The good relations thus established were, in my opinion, the real reason which, in 1925, induced the company to select the defenders as one of the only two firms invited to tender for the Bayrupert and secured to the defenders the preference. I may add that I see no reason to doubt Mr. Quack’s evidence and the truth of his contemporary letters to the effect that he, through Mr. McLaren, was already being apprised from time to time of the information which the pursuer was forwarding.
This view is sufficient to dispose of the pursuer’s claim in the action. As already noted, the evidence for the pursuer and the defenders on several issues of fact differ so radically as almost to compel choice between one 6İde and the other as a true representation of the facts. In what precedes it will be noticed that on some points I have preferred the testimony of Mr. Quack and Captain Walker to that of the pursuer, for I was not favourably impressed with the latter’s evidence on several matters. His explanations of several letters in the correspondence which were prima facie adverse to or inconsistent with his testimony I did not find convincing. And on one important matter, viz., the alleged agreement made with Mr. Quack in regard to fixing a flat rate of commission, I find myself, apart from Mr. Quack’s positive denial, unable to accept the pursuer’s testimony. This appeared to me to be quite inconsistent with or even contradicted by the correspondence.
Neither am I inclined to accept the pursuer’s testimony to the fact that Captain Walker assented to be a party to a dishonourable arrangement disclosed in the correspondence, according to which the and in a conflict I should be prepared to accept his testimony and that of Mr. Quack (who has since 1925 left defenders’ company and is now in other employment, and may thus be fairly represented as a quasi-independent witness) to the testimony of the pursuer, even with such limited support as the latter may obtain from the evidence of the witness Mr. Allan.
One matter which bulked largely in the evidence and in regard to which there is a most unhappy conflict in the testimony is in regard to the plans and specification of the Nascopie, the forwarding of which in June, 1922, lies at the root of the pursuer’s present claim. The plans (Nos. 153 and 151 of process) as also the specification (No. 155 of process) were produced by the defenders and spoken to by Mr. Quack and his head draughtsman Mr. Frew as the identical documents forwarded by the pursuer. On receipt they were examined, found to be insufficient for any practical working purpose, and laid aside in the defenders’ drawing office, where they remained until produced in process for the purposes of this case. I accept this evidence.
The evidence of the pursuer and of the witness Allan in regard to the origin of these documents is quite irreconcilable with that given by Captain Walker. I do not propose to examine it in any detail and I confess that the result of the evidence appears to me to leave the truth still somewhat in the dark. The crucial matter is as to the specification No. 155 of process. The pursuer states positively that this document is not the document which he forwarded to the defenders in June, 1922, which he asserts was a specification in booklet form bearing the name of the builders of the Nascopie, Messrs. Swan & Hunter. As above indicated, I reject the pursuer’s evidence on this point. It stands on the pursuer’s uncorroborated testimony, for Mr. Allan gives it no support but rather the contrary. The origin of No. 155 of process, which is dated June 1, 1922, is not doubtful if Mr, Allan’s testimony is not an entire fabrication. For Mr. Allan employed a certain Mr. Outram at this time to compile the specification of the Nascopie from plans of the vessel which he states were lent to him by Captain Walker, though this last statement is denied by Captain Walker in toto. No. 155 of process appears to -be one of the copies of Mr. Outram’s specification.
The conclusion, I think, is almost irresistible that, notwithstanding the pursuer’s denial and Mr. Allan’s somewhat qualified testimony to the negative, that somehow the pursuer obtained No. 155 of process via Mr. Allan. One reason at least for the pursuer’s repudiation of this view is his desire to * dissociate himself from Mr. Allan in the matter, in order to represent Mr. Allan’s testimony as entirely independent. This, however, may or may not be the true or only reason. İt is true that the story in regard to the obtaining of these plans told by Captain Walker will not square with and is opposed to the testimony both of the pursuer and of the witness Mr. Allan. He admits that he gave a temporary loan of the plans to the pursuer, but he states for a limited purpose connected with docking of the company’s ships. The plans he so lent were returned to him in a few days, and are still in his office. They have, however, not been produced. He denies lending any plans to Mr. Allan at any time. I think Captain Walker’s recollection of what happened cannot be accurate, for, if so, the plans actually produced in process are left entirely unaccounted for. But, if inaccurate at points, his evidence may be honest, and I so regard it.
Upon the whole matter accordingly, my judgment is for the defenders, and I shall assoilzie them from the conclusion of the summons,