Case Studies​

Case Briefing | The 4 You Case

Moran Yacht & Ship Inc
Kiriil Pisarev
Galaxias Maritime Limited


    1. This is a claim by brokers for commission on the sale of a superyacht belonging to a company owned by a wealthy Russian, Kirill Pisarev. On 18 May 2010 the claimant yacht brokers showed the yacht to another wealthy Russian, Alexander Miliavsky. The brokers had no further contact with Mr Miliavsky thereafter, but some 21 months later, in February 2012, one of Mr Miliavsky’s companies agreed to buy the yacht from Mr Pisarev’s company for €19.8 million. The brokers say that they showed the yacht to Mr Miliavsky pursuant to instructions given by Mr Pisarev on 11 May 2010 to market the yacht for sale and that they were an effective cause of the sale to Mr Miliavsky’s company, and are therefore entitled to commission. Mr Pisarev and his company say that although he did instruct the brokers to market the yacht some months later, at the time when they showed the yacht to Mr Miliavsky they did so on their own initiative and not on Mr Pisarev’s instructions, and that in any event the brokers were not an effective cause of the later sale.
    1. There are four issues to be determined:

                  a. Did Mr Pisarev instruct the claimant brokers to market the yacht at the meeting on 11 May 2010?

                  b. If so, were the brokers an effective cause of the sale to Mr Miliavsky’s company?

                  c. If so, to what commission are the brokers entitled?

                  d. Is Mr Pisarev personally liable for the tort of inducing breach of contract?


    1. The claimant, Moran Yacht & Ship Inc (“Moran”), is a yacht broker. The company is owned by Robert Moran, who is also its Chief Executive Officer. It is a Florida company based in Fort Lauderdale, but with offices in several countries. One such office is in Moscow. Robert Moran’s brother Paul is employed by the company as a senior sales executive.
    1. The first defendant, Kirill Pisarev, is a wealthy Russian with business interests in various fields including property investment and development. The principal entity through which he conducts such business is a Russian company called PIK. He is the ultimate beneficial owner of the second defendant, Galaxias Maritime Ltd, a British Virgin Islands company. Mr Pisarev and Paul Moran first met in September 2009 at the Monaco Boat Show. At that time Galaxias was soon to take delivery of a 47 metre luxury yacht, the “4YOU”, which was being built in Holland at the Heesen Shipyard. Mr Pisarev asked if Mr Moran could recommend a captain to take command of the yacht. Mr Moran recommended Captain Gordon Scott, who was duly hired as captain in October 2009.
    1. Paul Moran and Mr Pisarev met again at the Fort Lauderdale Boat Show in October 2009. They struck up a friendly relationship and Mr Pisarev appointed Moran to be the managers of the yacht and its exclusive chartering broker.
    1. The “4YOU” was delivered from the shipyard in December 2009 and was taken to the Caribbean for the winter season. Mr Pisarev and his family first tried out their new acquisition in January 2010. After a week’s cruise, Captain Scott reported that they had had “a fabulous time on the yacht”.
    1. However, in addition to the usual and expected teething issues with a new vessel which are generally sorted out by the shipyard during the warranty period, there were two matters which Mr Pisarev had not expected. One was that the yacht was less stable, and the other was that it was noisier, than he had anticipated. Both of these matters were the consequence of the design of the yacht as an aluminium hulled semi displacement vessel. This meant that it was lighter and faster than a steel hulled vessel, but these drawbacks were the trade off for this additional speed. Once this was explained to Mr Pisarev, he accepted the position and was no longer concerned.
    1. In or about March or April 2010 Paul Moran discussed with Mr Pisarev an opportunity to buy another yacht, to be constructed at the Amels Shipyard in Holland at what was considered to be a bargain price. This would be a slightly larger yacht, 54 metres in length. Moran was very keen to persuade Mr Pisarev to buy an Amels yacht, partly no doubt because it regarded this as an attractive opportunity for him, but also because it would generate commission for Moran not only on the sale from Amels but also (as Moran anticipated) on the sale of the “4YOU”, which Mr Pisarev would need to sell in order to pay for a new Amels yacht.
    1. On 11 May 2010 Mr Pisarev visited the Amels Shipyard with Paul Moran and Lidia Tsareva (a broker employed by Moran at its Moscow office) in order to see the quality of work of which Amels was capable and to discuss the proposal that he should purchase a new yacht. The discussion included possible changes to the standard specification which Mr Pisarev would want and ways of financing such a purchase. It was recognised on all sides that if he were to purchase a new Amels yacht, Mr Pisarev would need to sell the “4YOU”. It is (now) Moran’s case that at this meeting Mr Pisarev instructed Moran to market the “4YOU” “discreetly” or “confidentially” for sale for an asking price of between €27.5 and €28 million. That is denied by Mr Pisarev, who accepts that he was interested in buying an Amels yacht and that the sale of “4YOU” was discussed, but insists that he gave Moran no instruction to market the yacht on his behalf and did not know that it was doing so.
    1. It is Moran’s case that it did then begin to market the yacht in accordance with Mr Pisarev’s instructions, showing it to a number of potential buyers between May and September. The extent to which it did so is in dispute, but it is common ground that Ms Tsareva did show the “4YOU” to Mr Miliavsky on 18 May 2010. This happened when the yacht was at Monaco, just after the Monaco Grand Prix, which was one of the highlights of the summer season for wealthy yacht owners in the Mediterranean. Although it is accepted that Ms Tsareva showed the yacht to Mr Miliavsky, almost everything else about this visit is disputed. I return to this issue at [96] below.
    1. There was a meeting in Moran’s Moscow office on 7 June 2010 attended by Mr Pisarev and representatives of Amels as well as Paul Moran and Ms Tsareva. The purchase of an Amels yacht was discussed further, including discussion of different cabin layouts prepared by Amels.
    1. Following this meeting, on 16 June 2010 a letter of intent was signed by Galaxias for the purchase of an Amels yacht. This required a deposit of €250,000, but was not a binding commitment to purchase. It was in effect a down payment in order to reserve a building slot at the Amels yard.
    1. A further letter of intent was signed on 7 July 2010 for the purchase of a new 54 metre Amels yacht with a specification to be agreed, at a price of €26.6 million with a €250,000 non-refundable deposit payable within 5 days. Delivery of the new yacht was to be in June 2012. The letter of intent was accompanied by a financing proposal from Amels which included this provision regarding the marketing of the “4YOU”:

“A separate clause will be added to the building contract/loan agreement, which reflects that the Heesen 47m 4YOU will be marketed after this summer through Moran and that in case of selling 4YOU, the Buyer will pay in money according to the payment scheme of the building contract.”

    1. The final terms of the proposed shipbuilding contract between Galaxias and the Amels shipyard for the new yacht were agreed by early September. The contract was signed on 7 September 2010.
    1. At some stage in September 2010, although there is a dispute as to precisely when this occurred, Mr Pisarev instructed Moran to market the “4YOU” by general advertisement and at all major boat shows, including the Monaco Boat Show and Fort Lauderdale Boat Show. It is Moran’s case that this was not a new instruction to market the yacht. All that was new about it was that, whereas previously Mr Pisarev’s instructions had been to market the yacht to selected potential buyers confidentially and without advertising, he now asked that it be advertised more generally. It is the defendants’ case that it was only in September that Mr Pisarev instructed Moran to market the yacht at all.
    1. It was Moran’s case, and Paul Moran’s evidence, that at the Fort Lauderdale Boat Show which took place between 28 October and 1 November 2010, he and Mr Pisarev had dinner together every evening and that during one of these dinners he gave Mr Pisarev a copy of Moran’s standard sales terms (a “Worldwide Central Agency Listing Agreement” dated 11 October 2010) which he asked Mr Pisarev to sign, but that Mr Pisarev said that this was not necessary because he and Paul Moran were friends and did not need such documents. Moran’s pleaded case was that in this way its standard terms (which entitle it to a commission of 10%) came to govern the parties’ relationship and, moreover, did so retrospectively to the instruction said to have been given on 11 May 2010. The defendants say that this incident never happened. It is unnecessary to determine this particular factual dispute as in closing Mr Yash Kulkarni for Moran abandoned reliance on Moran’s standard terms as governing the parties’ relationship and Moran’s entitlement to commission.
    1. However, it is not in dispute that Moran was engaged to market the “4YOU” for sale from (at latest) September 2010 onwards, and that it duly did so. It is also not in dispute that although it was always Mr Pisarev who gave the relevant instructions on behalf of Galaxias and made any decision about whether to sell the yacht or at what price, and whether to accept or not any offers that were made, the contractual relationship between the parties was between Moran and Galaxias. Although in this action Moran seeks to hold Mr Pisarev personally liable for the tort of inducing breach of contract, it does not suggest that he ever undertook any personal contractual liability.
    1. The first offer to purchase the “4YOU” came in early September 2010, just before the Amels contract was signed on 7 September but at about the same time as its terms had been agreed and Mr Pisarev had authorised its execution.
    1. On 11 October 2010, Moran announced a “new central agency” (ie an exclusive agency) for the yacht, advertising it for sale at a price of €27.75 million.
    1. By early June 2011 the yacht had not been sold, although a number of offers had been made. However, whether because the price offered was too low or for other reasons, none of these came to anything. Paul Moran’s evidence was that this was a very difficult time for the yacht market generally as banks were not providing finance. It appears that by this time, and whether fairly or not, Mr Pisarev was beginning to lose confidence in the efforts being made by Moran on his behalf. On 8 June 2011 Paul Moran sought to reassure Mr Pisarev that the marketing of the “4YOU” was its “top priority”.
    1. There were further offers made during June and July 2011, but these too did not result in a sale. In late August, Mr Pisarev agreed to a reduction in the asking price. In late September 2011 the yacht was inspected by Alex Banning of Y.CO, another yacht broker, with his client. This led to an offer by his client’s company, Junport, on 25 September 2011. By 29 September, however, negotiations through Moran had reached a sticking point – at any rate as between the brokers – on the question of commission.
    1. Eventually an agreement with Junport was concluded without Moran’s involvement. The reason why Moran was excluded is not altogether clear. It was Moran’s case, and it sought and obtained a freezing order on this basis on 24 October 2011, that Mr Pisarev was simply being greedy, seeking to exclude Moran from its right to commission. It appears, however, that there was more to it than this and that, for whatever reason, Mr Pisarev had lost all trust and confidence in Moran and believed that it was pursuing its own interests to maximise commission on the sale of the yacht rather than seeking to protect his best interests. Clearly the relationship between Mr Pisarev and (at least) Paul Moran had been close, but it now turned sour. Whether or not he was right in what he supposed (which it is not necessary to decide) I find it hard to accept that Mr Pisarev would simply cut Moran out of any commission for no reason at all. In the event, however, the Junport deal was not concluded and the freezing order was discharged by consent.
    1. During December 2011 Mr Pisarev had dinner with Mr Miliavsky, a business associate, at a restaurant in Moscow. He told Mr Miliavsky that the “4YOU” was for sale and that the original price had been reduced. Mr Miliavsky remembered the name of the yacht and told Mr Pisarev that he had been on board in May 2010. The two men discussed whether Mr Miliavsky might be interested in buying the yacht.
    1. They met again at a business meeting in Courchevel in France during January 2012. Again they discussed the yacht. Mr Pisarev’s evidence was that he told Mr Miliavsky that the latter could have the yacht for €22 million and Mr Miliavsky offered €19 million. However, this was more in the nature of an indication of what Mr Miliavsky might be willing to pay than a firm offer. Mr Pisarev encouraged Mr Miliavsky to inspect the yacht and, at the end of January, Mr Miliavsky did so. He told Mr Pisarev that he was interested in buying the yacht. Mr Pisarev and Mr Miliavsky then had a series of telephone calls in which they negotiated the sale price, eventually agreeing on a figure of €19.8 million.
    1. On 29 February 2012 a contract was signed between Galaxias as the seller and Mr Miliavsky’s company, Gildo Finance Corporation. Completion was on 2 April 2012. It is this sale on which Moran claims to be entitled to commission.


    1. Although Moran’s case now is that instructions were given by Mr Pisarev to market the yacht on 11 May 2010, that case was never pleaded and was only advanced in the skeleton argument served on behalf of Moran shortly before the trial. Although Mr James M. Turner QC for the defendants did not object to this case being advanced, he submitted that it was important to trace the way in which Moran’s case has changed.
    1. In the Particulars of Claim, served on 18 April 2012, the case advanced was that:

“In or about September 2010, [Mr Pisarev], on behalf of [Galaxias], verbally engaged [Moran], through Mr Paul Moran on behalf of [Moran], as exclusive broker to market the Yacht for sale (‘the Contract’).”

    1. This was supported by a statement of truth signed by Moran’s solicitor, who had previously sworn an affidavit to the same effect in support of the application for a freezing order at the time of the proposed Junport sale. There was no hint of any earlier engagement, either in the affidavit or the Particulars of Claim, although both documents did go on to rely on the written Worldwide Central Agency Listing Agreement dated 11 October 2010 referred to at [16] above.
    1. The Particulars of Claim then pleaded that Ms Tsareva introduced Mr Miliavsky as a potential purchaser and showed him the yacht “in or about September 2010”, that is to say after the verbal engagement earlier in the same month.
    1. The Defence was served on 13 June 2012. It included this paragraph:

“On or about 18 May 2010, Mr Alexander Miliavsky was shown round the Yacht by [Ms Tsareva] without the Defendants’ knowledge and at a time when the Yacht was not for sale and [Moran] had neither permission nor authority to seek potential buyers of it.”

    1. It is now common ground that the date of 18 May 2010 is correct. Thus, from the outset, the defendants have correctly identified the date on which Mr Miliavsky was shown the yacht and have made clear that this happened at a time when Moran had no instructions to market the yacht for sale. It has, therefore, always been critical to Moran’s case to prove that it was engaged to market the yacht before Mr Miliavsky was shown round.
    1. On 12 July 2010 Moran served Further Information about its case in response, among other things, to a request to specify the date of the conversation in September 2010 in which it was alleged that Mr Pisarev had engaged Moran. This prompted a change in Moran’s case. The response was:

“On 7th June 2010, Mr Paul Moran met [Mr Pisarev] at [Moran’s] Moscow office and discussed the purchase of another newbuilding under construction at the Amels Shipyard in Holland (‘the Amels newbuilding’). In order to purchase this vessel, [Mr Pisarev] wished to sell “4YOU” and accordingly he instructed Mr Paul Moran to market the vessel ‘quietly’ to existing clients of [Moran]. [Mr Pisarev] informed Mr Paul Moran and Lidia Tsareva of [Moran] that [Moran] would be exclusive agents for the sale of the yacht. …

During the period June — September 2010 [Moran] showed “4YOU” to the following prospective purchasers (at least): Alexander Miliavsky … with a view to eliciting offers to purchase the vessel.”

    1. Later in the same document a further response stated that:

“As described, [Moran] had been marketing “4YOU” at the request of the Defendants since June 2010. …”

    1. Finally in this Further Information, in response to a specific request to confirm that the pleaded date of September 2010 as being the date on which Mr Miliavsky had been shown the yacht was correct, Moran pleaded:

“In or about September 2010 a Mr Miliavsky was introduced by Lidia Tsareva of [Moran] and visited “4YOU” as a prospective purchaser.”

    1. This Further Information was also supported by a statement of truth signed by Moran’s solicitor.
    1. Thus, when given the opportunity to revise its case in the knowledge that the defendants’ case was that Mr Miliavsky’s visit had been on 18 May 2010, Moran did change its case as to the date of its verbal engagement. It no longer contended that this had occurred in September, but now said that it had occurred at the meeting on 7 June 2010. At the same time it introduced a new aspect of the verbal engagement, to the effect that Mr Pisarev’s instruction had been to market the vessel “quietly” to Moran’s existing clients. However, Moran continued to insist that Mr Miliavsky’s visit had not taken place until September, and thus after Moran’s engagement on 7 June 2010. This cannot have been done without careful thought being given not only to whether Mr Miliavsky’s visit had been on the date of 18 May 2010 as alleged by the defendants, but also to whether instructions had been given before that date for the yacht to be marketed.
    1. Witness statements were served on behalf of Moran. Paul Moran’s statement, dated 29 November 2013, repeated the case pleaded in the Further Information, that instructions to market the yacht had been given at the meeting on 7 June 2010 at Moran’s Moscow office, and that Moran began showing the yacht to potential buyers in June 2010. However, Mr Moran said nothing about the instruction having been to market the vessel “quietly” or only to existing Moran clients. He did say that Mr Miliavsky had been shown the yacht during the period June — September 2010 (ie not in May). Ms Tsareva’s evidence about when Moran had been instructed was rather vague. In her statement, dated 16 October 2013, she said only that Moran was appointed “from June 2010” and that Mr Miliavsky visited “during the last two weeks of June 2010”.
    1. Moran also served supplementary witness statements from Paul Moran and Ms Tsareva. In his supplementary statement dated 26 February 2014 Paul Moran stated, for the first time, that the instruction to market the yacht had been given in May 2010, but he said that the meeting at Amels took place on 10 (not 11) May. Once again, he said nothing about such marketing being done “quietly”. Nor did he mention the price at which the yacht was to be marketed. He said:

“At this meeting, Mr Pisarev stated that he could only finance the Amels 177 if he sold “4YOU”, and he informed me that he wanted us to sell the vessel. I took this to be an instruction to sell the vessel, which was confirmed in my meeting on 7 June 2010 in Moscow.”

    1. Mr Moran did not explain how it had happened that his previous statement had placed these previous instructions as having been given at the meeting on 7 June 2010 in Moscow.
    1. Ms Tsareva’s supplementary statement, dated 13 March 2014, did not say anything about when the instructions had been given, but did say that Mr Miliavsky’s visit to the “4YOU” in Monaco had been in May 2010 during the Monaco Grand Prix. She said that her previous reference to a visit in June was an error due to relevant information being unavailable to her as a result of her computer having been stolen.
    1. That being the state of the written evidence, Moran’s case in opening was that the defendants instructed it to market the yacht “on a discreet basis” in May 2010 although none of its written evidence had said anything about such marketing being done quietly. By the conclusion of the trial, however, it had become clear that the meeting at Amels had taken place on 11 (not 10) May 2010.
    1. When they came to be cross examined, neither Ms Tsareva nor Paul Moran could give a satisfactory explanation of these changes in Moran’s case or even of how it had happened that their initial witness statements said what they did.
    1. Ms Tsareva said that it was very hard to remember dates and that not only had her laptop been stolen (an explanation which had been given in her witness statement and also in a witness statement by Robert Moran which said that this had happened in March 2011) but also that there had been a system failure on Moran’s server, also in March 2011, which had caused a loss of her outgoing e-mails (a problem which had not previously been mentioned, despite repeated requests for disclosure by the defendants’ solicitors). However, while I would accept that it is not easy to remember dates, none of this would explain her failure to remember that the visit to the yacht by Mr Miliavsky had taken place during the time of the Monaco Grand Prix, a memorable event in May whose date was easily ascertainable, and not in September or June.
    1. Paul Moran acknowledged that, as was apparent from documents from his computer which were only disclosed on the first day of the trial, Moran had at all times had available to it material which showed that there was a visit to Amels on 11 May 2010. He insisted also that he remembered distinctly the meeting which had taken place. If this was true, there should have been no difficulty in Moran advancing from the outset the case now advanced, that it was at the 11 May 2010 Amels meeting that Mr Pisarev had given instructions to market “4YOU”. Whatever problems (if any) may have existed with Ms Tsareva’s computer should not have had any effect on Moran’s ability to plead its current case if that case had been true. When asked to explain the omission of any reference to the 11 May 2010 Amels meeting in the pleadings or his initial witness statement, Paul Moran could only say rather lamely that “the meeting, I don’t know, must have slipped my mind”.
    1. On behalf of the defendants Mr Turner submitted that the changes in Moran’s case were significant for two reasons. The first was their impact on the credibility of the Moran witnesses. The second is that the defendants were prejudiced because Moran’s disclosure was focused on its pleaded case of an instruction in September (or subsequently June) rather than May 2010.
    1. Mr Kulkarni submitted, however, that this was no more than sloppiness by the Moran witnesses. However, I find that very hard to accept. In my judgment the changes of case and the inadequacy of the explanation for the very limited disclosure given by Moran in relation to the May period do mean that the Moran witnesses’ evidence needs to be approached with considerable caution.


The claimant’s witnesses

    1. Moran called four witnesses. None of them, in my judgment, gave satisfactory or reliable evidence.

Lidia Tsareva

    1. I have already mentioned the excuses given by Ms Tsareva for the vague and inaccurate evidence given in her witness statements – not only a theft of her laptop but also a breakdown in Moran’s computer system, both apparently occurring at the same time, although it was only the former which had been mentioned in her (and in Robert Moran’s) written evidence. These are easy excuses to make, but I am not persuaded that they have any substance. Other documents from the period when e-mails were supposed to have been lost were disclosed, including some which were disclosed on the first day of the trial, which were evidently regarded by Paul Moran as supporting Moran’s case (indeed the copies disclosed bore his and Robert Moran’s manuscript annotations pointing out how they did so).
    1. Moreover, when Ms Tsareva was first asked about the explanation given for her mistake about the date of Mr Miliavsky’s visit, she referred only to the previously unmentioned system breakdown. It was only when it was pointed out to her that what she had previously said was that her computer had been stolen that she said that this had happened as well. This suggested, at the very least, a degree of carelessness about the accuracy of her evidence. She claimed also to have been in contact with Amels during the two weeks or so before the trial, asking Amels to send copies of e-mails from the May/June 2010 period, and said that Amels had sent e-mails which were “very helpful” to Moran’s case, but these (if they existed) were never disclosed.
    1. It was then pointed out to Ms Tsareva that in any event there should have been no difficulty in remembering that Mr Miliavsky’s visit took place during the time of the Monaco Grand Prix, not least because in order to reach the yacht Mr Miliavsky and his wife, accompanied by Ms Tsareva, had to climb over some of the crash barriers which had been installed for the race. Moran’s initial case (for which Ms Tsareva was the source of the information) that Mr Miliavsky had visited in September and Ms Tsareva’s first witness statement (saying that the visit had been in June) were therefore completely inexplicable.
    1. Ms Tsareva also claimed that e-mails existed dated 20 May 2010 in which she had offered “4YOU” to another potential buyer (ie not Mr Miliavsky) which had been provided to Moran’s solicitors. These e-mails were never disclosed. In view of all these matters I cannot regard Ms Tsareva as a reliable witness.

Robert Moran

    1. Robert Moran was the president, CEO and owner of Moran. His evidence generally was highly argumentative. On 14 April 2009 he pleaded guilty in the United States to a charge of filing a false income tax return. His offence consisted not only of failing to declare income of some US $25,000 on which tax was payable, but also of failing to disclose the existence of a Swiss bank account containing total assets of US $3.4 million, which he knew he was obliged to disclose. Mr Moran admitted the conviction when it was put to him, as he had to, but sought to minimise its seriousness, maintaining that his criminality was limited to the failure to pay income tax on the US $25,000 interest earned on the account. Reference to the court papers showed that this was misleading, and that the deliberate failure to disclose the US $3 million in the account was itself criminal. This was indicative of Mr Moran’s tendency to gloss the facts when he could in order to present his position in a more favourable (or less unfavourable) light.
    1. Mr Turner submitted that this conviction, and Mr Moran’s evidence about it, were relevant for two reasons – partly as reflecting generally on his credibility, and partly that a conviction for failing to disclose information which he knew he was obliged to disclose was relevant in considering the defects in Moran’s disclosure, with apparently helpful selected documents being disclosed on the first day of the trial and an inadequate explanation for the absence of documents from the critical May 2010 period. I accept those submissions, although they are no more than factors to be taken into account in considering Mr Moran’s evidence and the reasons given concerning loss of documents.
    1. Mr Moran said also that he was told by his brother Paul and by Ms Tsareva before the October 2011 application for a freezing order in connection with the Junport sale that Mr Pisarev had told them at the 11 May 2010 meeting at Amels that he wanted to sell the “4YOU” immediately. When asked why that was not included in his solicitor’s affidavit in support of the application (for which he was the stated source of information) or in any of the pleadings or witness statements in this case prior to Paul Moran’s supplementary statement, he could only say that he had no idea. His evidence that he had been told this from the outset was obviously untrue.
    1. Mr Moran’s evidence about commission rates was also unsatisfactory. His evidence was that he was the only person in his company authorised to agree commission rates. Ms Tsareva gave similar evidence. She said that commission was nothing to do with her and outside her authority and that commission rates were always determined by Robert Moran. She was taken to an e-mail dated 19 April 2011 in which she had written to Mr Pisarev, in the context of an offer to buy the “4YOU” at a price equivalent to €21 million which Moran had received, that:

“Also, please note that it is very important that you and Paul discuss the brokerage commission for the sale of the yacht. The standard commission rate is 5% from the sale price.”

    1. Her response was that this was written “1 million percent” on Robert Moran’s instructions, because she had no authority to say anything about commission rates without first being told by him exactly what to say. Robert Moran, however, disowned this e-mail. He accepted (apparently reluctantly) that he had told her to put the rate of 5% in the e-mail but insisted that Ms Tsareva was wrong to say that the standard rate of commission was 5% (Moran was claiming to be entitled to 10%) and denied that this was what he had told her to say. Rather, he said that Ms Tsareva did not know what the standard rate was and that he had told her to offer to accept a rate of 5% on the particular deal being considered by way of concession from the usual higher rate. I would accept that there is no “standard rate” and that commission is negotiated on a case by case basis, but I see no reason to doubt that Ms Tsareva wrote what she did on Robert Moran’s instructions. The difference between what she wrote and what he says that he told her to write is too great to be explained away as the result of a misunderstanding.

Gordon Scott

    1. Captain Scott did not provide a statement in the initial exchange of witness statements. His statement was one of the supplementary statements served by Moran in response to the defendants’ statements. Three points should be mentioned which, in my judgment, show that his evidence cannot be relied upon.
    1. First, in his witness statement Captain Scott said that Mr Pisarev’s first stay on the yacht lasted until the end of January 2010 and that Mr Pisarev was unhappy with the performance and stability of the “4YOU” and said that he would like to sell it. He was wrong about the duration of the stay, which had been only for one week, and did not mention the “fabulous time” e-mail referred to at [6] above. Moreover there is no contemporary record of any unhappiness with the yacht or indication of a wish to sell at this very early stage even though Captain Scott accepted that this was a matter which he would have reported to Moran. I conclude that this supposed almost immediate desire to sell was invented. Mr Pisarev was happy with the “4YOU” albeit that, when Moran presented him with the opportunity to acquire an even better Amels yacht at a very attractive price, he was prepared to consider it.
    1. Second, Captain Scott’s statement went on to say that after Mr Pisarev’s January Caribbean cruise, the yacht sailed to Florida for warranty work to be carried out, and that while it was there Paul Moran and another Moran broker “showed the yacht to various clients who were interested in buying the yacht”. When Robert Moran gave evidence he was asked about this and said it was a mistake by Captain Scott: what had happened was that the yacht was shown to clients who were interested in having a similar yacht built at the Heesen shipyard and that it was even illegal in the United States to show foreign flagged vessels for sale or charter. That may be true, although Captain Scott’s evidence, as stated in his witness statement, had been very clear, and appeared to be included in order to support his evidence that Mr Pisarev had decided to sell “4YOU” as early as January 2010. When Captain Scott was asked about what he had said in his witness statement (only a few minutes after he had confirmed its truth on oath) he said that it was wrong. It appears that, having heard Robert Moran’s evidence about this the previous day, he had decided to change his evidence.
    1. Third, Captain Scott’s written evidence stated that:

“Throughout the Summer of 2010, the owner of the MY 4YOU, Mr Pisarev used the vessel with his family and friends. When ever the yacht was in an area where it could be shown to perspective [sic.] clients, Moran Yacht and Ship did so.”

    1. This was clearly intended to convey the impression (a) that Mr Pisarev was on board when prospective buyers were shown round and therefore knew that the yacht was being offered for sale by Moran and (b) that the yacht was shown to many such prospective buyers during the summer months. However, Captain Scott accepted in cross examination that he was not suggesting that Mr Pisarev was on board when prospective buyers were on board apart from in May during the Grand Prix (as to which see [65] below) and September at the Monaco Boat Show (by which later month it is common ground that Moran had been instructed to market the yacht). He was forced to accept also that between 22 May and the beginning of September the itinerary and chartering commitments of the yacht were such that there were almost no opportunities for buyers to be shown round and that he had no recollection of any such visits. The evidence in his witness statement was highly misleading.

Paul Moran

    1. I have already referred to the fact that documents from Paul Moran’s computer were only disclosed on the first day of the trial when they clearly should have been disclosed from the outset and to the unexplained discrepancy between his written evidence and his claim in oral evidence to have a clear recollection of the 11 May 2010 Amels meeting (as to which see further [77] to [79] below). His evidence regarding the clause in the letter of intent referred to at [13] above was also surprising (see [88] below).

The defendants’ witnesses

    1. The defendants called Mr Pisarev and Mr Miliavsky.

Kirill Pisarev

    1. Mr Pisarev’s evidence was generally clear, consistent and credible. He focused on the questions asked and gave responsive answers, not trying to argue a case in the way that the Moran witnesses had done. He was prepared to make appropriate concessions and accepted that the sale of “4YOU” had been discussed at the Amels meeting, although no instruction to sell had been given.
    1. He acknowledged that due to severe losses in the Russian real estate market in 2009 he had lost a lot of his wealth and that liquidity in 2010 was tight, albeit that (as he put it) for him cash flow difficulties did not mean that he did not have €5 or €10 million available. He acknowledged also the possibility that Paul Moran or Ms Tsareva may have brought clients on to the yacht during the period of the Grand Prix at Monaco, but explained that there were a lot of people on board, enjoying the atmosphere of the Grand Prix and drinking champagne, and that he was quite willing for Paul Moran to bring guests with him, but that nobody had told him that such clients were there to inspect the yacht as potential buyers. That evidence rang true. He agreed also that Ms Tsareva had told him that she had shown somebody the yacht, the relationship with Moran being such that he was quite happy for this to happen, but insisted that she had not told him that it was with a view to selling the yacht.
    1. Mr Kulkarni referred to correspondence in response to the October 2011 freezing order in which Mr Pisarev’s solicitors had stated that there was no central sales agreement in place and never had been, suggesting that this was an untrue statement made on Mr Pisarev’s instructions which therefore affected his credibility adversely. In context, however, it is clear that Mr Pisarev’s solicitors were not denying that Moran had been instructed to sell the yacht, but were merely denying the contention (now abandoned by Moran) that Moran’s written “Worldwide Central Agency Listing Agreement” governed the parties’ relationship (see [16] above). In my judgment the solicitor’s statement casts no doubt on Mr Pisarev’s credibility.
    1. Mr Kulkarni relied also on an offer made on behalf of Mr Pisarev in December 2011 to pay €300,000 to Moran and to waive a claim for French VAT of about €195,000, submitting that this was a recognition of liability to pay commission on a sale to Mr Miliavsky. In my judgment it was no such thing. I do not accept that Mr Pisarev even had a sale to Mr Miliavsky in mind at that stage. What his offer recognised was that Moran was able and determined, as it had shown in relation to the abortive Junport deal, to interfere with any sale of the yacht. By that stage Mr Pisarev was very keen to sell the “4YOU” and knew that Moran had shown it to a considerable number of potential buyers since September 2010, any of whom could have ended up buying the yacht. It could well have made sense to buy Moran off. Similarly, I attach no significance to the fact that the sale contract with Mr Miliavsky’s company included a clause which recognised that Moran might assert a claim to commission. That is very different from recognising any right to commission on Moran’s part.

Alexander Miliavsky

    1. Mr Miliavsky gave his evidence with considerable charm. Although he is a business associate of Mr Pisarev and has some social dealings with him, they were not (and are not) close personal friends. Mr Miliavsky had no personal interest in this litigation (it was suggested to him at one point by Mr Kulkarni that he did, but that suggestion was clearly based on a misunderstanding and was properly withdrawn) and had no reason to do other than give accurate evidence to the best of his recollection. I am satisfied that is what he did.
    1. One aspect of his evidence was particularly criticised by Mr Kulkarni. When Mr Miliavsky visited the “4YOU” in May 2010 he already owned a smaller yacht, the “MOSCA”, with which he said that he was quite content. He said that he was not really interested in buying another yacht at that time. Mr Kulkarni put to him an e-mail dated 30 July 2010, apparently forwarded from his own computer, which referred to “boat for sale”, and suggested that this referred to the “MOSCA” and undermined Mr Miliavsky’s evidence on that point. However, the very limited documentary material available about this is insufficient for any such conclusion to be reached. As Mr Turner pointed out, Mr Miliavsky had no reason to lie about this and I do not accept that he did so. There is no evidence that the “MOSCA” was being advertised for sale at this time and it is hard to think that it could have been advertised without Moran being aware of this.


    1. Mr Kulkarni put Moran’s case in two ways. His primary case was that express instructions were given by Mr Pisarev at the meeting held on 11 May 2010 at the Amels shipyard to market the yacht at a price of between €27.5 and €28 million. Alternatively, however, he submitted that Mr Pisarev was aware that Moran was marketing or would be marketing the yacht and that an instruction to do so, or at any rate an agreement to pay a reasonable commission in the event of a sale, should be implied.
    1. Three of the witnesses were present at the 11 May 2010 meeting at the Amels shipyard and therefore in a position to give evidence about whether Mr Pisarev gave instructions at that meeting to market the yacht for sale.
    1. I have referred at [37] and [40] above to Ms Tsareva’s written evidence, which gives no support at all to Moran’s case about this meeting. Her oral evidence was given by video link from Moscow and was not assisted by occasional breaks in communication or by the fact that she did not have some documents which were only disclosed by Moran on the first day of the trial.
    1. Ms Tsareva’s oral evidence was that she would never have shown the yacht to Mr Miliavsky if Mr Pisarev had not instructed her that the yacht was for sale and that he had said that it should be marketed discreetly and not advertised. She said that he had already made clear, after his January Caribbean cruise, that he did not like “4YOU”. She insisted that it was at the Amels meeting that Mr Pisarev had made up his mind that he wanted to go ahead with the purchase of a new yacht, even though no documents were signed until much later and it was only later that Amels confirmed that it could provide Mr Pisarev with changes to the standard specification that he wanted. In fact, although Mr Pisarev liked what he saw at Amels and was certainly interested, the documents show that he was by no means committed to proceed at this stage. A later e-mail from Paul Moran, dated 6 July 2010, recognised that even at that date Mr Pisarev might decide “not to go ahead”, in which case all he would lose would be his deposit of €250,000.
    1. However, when it came to Ms Tsareva’s evidence about what instructions were actually given at the Amels meeting, her evidence about the price at which the yacht was to be sold was rather unclear. When first asked whether Mr Pisarev had told her the price at which the yacht should be offered for sale, her response was not to say that he had, but that she knew that Mr Pisarev had spent about €27.5 to €28 million on “4YOU” and that he would want to get his money back, and therefore knew that something in this region would be the asking price, but that he would not necessarily have given her a price.
    1. Later, when she was pressed further about the price, she would say no more than that a price of €27.5 to €28 million was discussed:

“Q … The reason the figures are different, Miss Tsareva, is because at that time Mr. Pisarev had not agreed an asking price or given one to you. That’s right, isn’t it?

A No, sorry, not right. Mr. Pisarev gave us in the meeting with Amels the clear instruction to sell the motor yacht 4YOU, and I wouldn’t call my office and tell them they can offer their client a boat for 27 million. I wouldn’t even drive from Antibes with Mr. Miliavski to show him the vessel. I just wouldn’t do it because I wouldn’t have had instructions to sell the motor yacht 4YOU. It just doesn’t happen in the brokers’ world.

MR. JUSTICE MALES: Can I just clarify something, Miss Tsareva. I understand you are saying that Mr. Pisarev instructed you to sell the yacht. What I’m not clear about is whether you are saying that he gave you an asking price at this meeting in May.

A Sir, we discussed prices. We discussed what the boat was worth. We discussed what we can sell it for. We discussed it. You know, now if you ask me and say, “Do you remember that it was exactly 27,700,000 or 27,000,000?” then no, I do not remember what exactly the price was. But we discussed quite a small corridor that was obvious for the people who were there to — and this corridor obviously showed later on in October in the asking price. This price, I explained to you where it came from. It came from the contract price, plus the money that Mr. Pisarev had spent on the boat.”

    1. Taking this evidence as a whole, Ms Tsareva’s evidence, therefore, was not that Mr Pisarev told her that the price for the yacht would be €27.75 million, the price which she said that she gave to Mr Miliavsky, but that it was understood that this was the kind of price which he would need in order to recover what he had spent on “4YOU” and that a price in the range of €27.5 to €28 million was discussed.
    1. I have referred at [37] and [38] to Paul Moran’s written evidence. In cross examination he gave very detailed and precise evidence about what had happened at the Amels meeting which went much further than his written evidence:

“Q And if Mr. Pisarev has instructed you to sell the yacht at Amels on the 11th May 2010 you would have remembered that, wouldn’t you?

A I remember it, absolutely, because at the meeting in Amels when we had the meeting — how it transpired with the meeting in Amels, I flew on the 10th May, which was why there was some confusion whether the 10th and the 11th May, which I am sure you will bring up, and I arrived I think on the 10th May in Holland. We met at the shipyard on the 11th, we met in the offices of Amels with Rob Luijendijk, who is the managing director, and Yohan Karls, who is their technical director. We sat down, had formalities, pleasantries, introductions. We talked about the Amels Shipyard. They pulled out plans on the boats they were building at the moment which were 54 metres, not 55. Then we went and toured around the shipyard and had a look at a 54 metre being built. The quality on the boat was a lot, lot better than Heesen. Kirill recognised that. He liked the size, he liked the layout, he liked the feel of the boat, the strength, the boat’s strengths. We came back into the facility, into the offices, and sat down discussing the boat.

After the meeting with them me and Kirill sat there with Lidia but in — sorry, I go back. In the meeting Kirill asked Rob Luijendijk would he take the trade of 4YOU on a new Amels. Would he take a trade. Rob Luijendijk said no. Kirill asked him could he get finance for the project. Rob Luijendijk said he would check, he couldn’t answer that yet. When Rob Luijendijk left the office with Yohan I sat there with Kirill and we were discussing it, and he said, “Offer my boat for sale”. I said to him, “What number, how much?” Only an owner can tell you how much. I cannot tell an owner how much to sell his boat for. He said, “Between €27½ million and €28 million”. I said, “Okay”. That’s when we instructed Lidia. Lidia knew about it. She sent an email. I called Captain Scott, I don’t know if it was that night or the night before, and I said, “Confidentially, the boat is for sale”. I flew back that night with Kirill. I think we left the shipyard at 4:30, we flew out of Brussels to the south of France, to the Monaco Grand Prix. We were friends then. We went out for dinner, we had drinks, we had dinner the whole of the show. I met him throughout the summer, was in his house in Cap Ferrat with his family, with his children, played football with his children, because he was a friend. He had come to Fort Lauderdale to visit me, spent time with me every day in Fort Lauderdale, lunch, dinner, going out. We continued to have a very strong friendship. So I would not put words into an owner’s mouth by saying his boat was not for sale. He has to tell me and he has to tell me the number.”

    1. He added a little later that the instruction was to offer the vessel “discreetly”.
    1. It is extraordinary, given such a full and precise recollection, that Moran’s eventual case on this obviously critical meeting was not pleaded from the outset or even set out in Mr Moran’s witness statements. It should also be noted that there is a difference, although only of emphasis, between Mr Moran’s and Ms Tsareva’s evidence about the discussion of price. Mr Moran said that it was entirely Mr Pisarev’s decision and that, apparently without any discussion, Mr Pisarev came up with a price of between €27.5 and €28 million. Ms Tsareva’s evidence, set out above, was that there was discussion, and that the price finally determined was based upon what Mr Pisarev would need in order to recoup his investment in “4YOU.”
    1. Mr Pisarev’s evidence was that the possibility of selling the “4YOU” was discussed at the Amels meeting, but no instruction was given:

“Q I will put the case for the last time. At this meeting on the 11th May 2010 you instructed Moran to market the yacht for sale discreetly at that stage.

A Not at all; not at all. We had a discussion about the prices, about the market, but there was no direct instruction to sell the boat.”

    1. Later in the cross examination Mr Kulkarni put a different version of what might have happened:

“MR. KULKARNI: During your evidence yesterday, Mr. Pisarev, you acknowledged that there would have been discussion about selling the 4YOU. Your evidence today seems to be different to that, which is that there was no discussion.

A No, it was general discussion, general discussion about all the situation in general, because, of course, if, for example, in the future, I make a decision to buy the boat, I have to sell it, and it was discussion. But there was no exact – how to say – command to sell, instruction to sell.

Q So, when you were having these general discussions about selling the 4YOU, can you remember what sort of words you would have used?

A Not at all.

Q Might you have said something like, “We need to find out how much the 4YOU can fetch”?

A Probably, but I don’t remember.

Q You may possibly have said, “Could you find out how much the 4YOU could fetch?”

A I’m a businessman, and I understand more or less the price of this boat. Probably, during the discussion, we touched upon this point, but I don’t really remember all the circumstances of this discussion and all the wording.

Q So you could have said it, but you do not remember?

A I don’t remember.”

    1. Mr Kulkarni explained that while Moran’s primary case was that there had been a direct instruction to market the yacht for sale, an alternative case was that Mr Pisarev had said words such as “Could you see what the vessel will fetch” and that this would amount to an instruction. However, neither Paul Moran nor Ms Tsareva gave any evidence to support the alternative case and I do not regard Mr Pisarev’s evidence in the passage set out above as a sufficient foundation for any finding that this is what occurred. Nor would I accept that such words, if they had been used, would amount to an instruction to offer the yacht for sale.
    1. I accept the evidence of Mr Pisarev that no instructions were given to market the yacht at the Amels meeting, although the possible future sale of the yacht was discussed. I do so for four reasons.
    1. First, Mr Pisarev was a truthful and reliable witness. The evidence of Paul Moran and Ms Tsareva was not reliable, for the reasons already given.
    1. Second, there is no contemporary record of any instruction to market the yacht having been given. If this had happened as the Moran witnesses now say, it is very likely that internal e-mails recording and referring to this instruction would have been generated. The closest to any such record is an e-mail dated 20 May 2010 from a colleague of Ms Tsareva’s in Moran’s Moscow office to a lady called Svetlana in which it is said that:

“I have spoken to my director Lidia Tsareva about our conversation and received new information that motor yacht 4you about which we have already informed you today, confidentially became for sale … the vessel is ready to be sold at 27 mil euro.”

    1. This was not, as Mr Kulkarni submitted it was, an internal Moran document. Svetlana was (or was representing) a potential client. When Ms Tsareva was asked about this document, she sought to explain the statement that the yacht was “ready to be sold” at a price of €27 million (when her evidence had been that Mr Pisarev’s asking price had been €27.5 to €28 million and that she had given Mr Miliavsky a price of €27.75 million only two days earlier) by drawing a distinction between the seller’s asking price and the broker’s opinion as to what the seller would take. I do not accept that explanation. It is most unlikely that in the first indication of a price to a potential buyer Ms Tsareva’s colleague would have knocked between €500,000 and €1 million off the asking price. In my judgment this e-mail is entirely consistent with the defendants’ case that Moran expected that “4YOU” would be for sale and was acting on its own initiative to try and put together a deal which could be presented to Mr Pisarev, and that it believed that in view of his outlay on the yacht and the discussion at the Amels meeting a price in the region of €27 million would be acceptable to him.
    1. I would add that, on its face, the e-mail suggests that Ms Tsareva’s colleague had been discussing “4YOU” with a potential buyer even before his conversation with Ms Tsareva, which goes some way to undermine the Moran evidence that a yacht would not be discussed with a potential buyer without the owner’s instructions that it was for sale.
    1. Third, the letter of intent signed on 7 July 2010 provided expressly that “4YOU” would be marketed through Moran “after this summer” (see [13] above). That is a contemporary statement of what the parties expected to happen and how the sale proceeds were to be applied. It would not have made much sense to include such a clause if Mr Pisarev had already given instructions for the yacht to be sold immediately. Paul Moran’s evidence was that this was a clause insisted upon by Amels for its own protection because it was concerned that without selling the “4YOU” Mr Pisarev would not have the funds to pay for his new Amels yacht. But he also said that Mr Rob Luijendijk of Amels knew that the yacht was already being marketed by Moran from May onwards. If that were so, it would be very odd that Amels should put forward a clause which was not only factually inaccurate but would fail to give it the protection it needed in the event that “4YOU” was sold during the summer period. While the possibility of a misunderstanding by Amels cannot be completely ruled out, this clause supports the defendants’ case.
    1. Fourth, it would be surprising if Mr Pisarev had made a decision to sell “4YOU” at a time when, however interested he may have been in an Amels yacht, discussions with Amels were only at a very preliminary stage. Indeed Paul Moran’s e-mail of 6 July 2010 to Mr Pisarev’s assistant Alexander Goubarev recognised that even at that stage Mr Pisarev might decide not to go ahead with the Amels purchase, in which case he would lose no more than his deposit of €250,000. That Mr Pisarev gave the instruction to sell at or about the time in September when the Amels contract was signed (or when it was clear that it was about to be signed) is far more probable than that he gave it in the firm terms alleged as early as 11 May 2010. It is not surprising that Moran’s initial case put the instruction in September rather than May. That was always inherently probable.
    1. Mr Kulkarni put to Mr Pisarev documents suggesting that Moran sent him an offer to purchase “4YOU” for a price of €21 million at the beginning of September 2010, to which he countered with an offer to take €25 million, all this happening before the Amels shipbuilding contract was executed. It was suggested that this contradicted his evidence that instructions to sell the yacht were only given after the execution of the shipbuilding contract. Mr Pisarev accepted that it might be that he was wrong in saying that instructions were given after the Amels contract was signed, but it was definitely at the beginning of September. Even if Mr Pisarev’s statement was wrong, that does not in my judgment support any inference that such instructions had been given as early as 11 May 2010. As Mr Pisarev also pointed out, by this time it was clear that the yacht would be for sale and it was at least possible that Moran was putting forward this offer knowing that would be so. Indeed by the time of these events the Amels contract had been agreed and was ready for execution, even if not yet formally signed.
    1. Mr Kulkarni submitted that it was contrary to commercial common sense to think that Moran would market the yacht for sale unless it had been instructed to do so. I do not agree. Although the Moran witnesses denied that this was their practice, the disclosed documents show several examples of brokers seeking to drum up interest or to put together a deal without instructions to do so. There is nothing implausible about the idea that Moran should seek to interest buyers in the yacht with a view to presenting Mr Pisarev with an offer in circumstances where it knew that he was becoming interested in the Amels purchase for which a sale of “4YOU” would be necessary. It was certainly in Moran’s commercial interest to do what it could to promote the Amels business, which would bring it commission not only from Amels but also on the sale of “4YOU”. I find that this is what Moran did.
    1. Accordingly, Moran’s case that there was an express instruction must fail. So too must its case of implied agreement based on Mr Pisarev’s knowledge of and acquiescence in Moran’s marketing of the yacht to prospective buyers in and from May 2010. I accept his evidence that he had no such knowledge.


    1. The issue whether Moran was an effective cause of the sale to Mr Miliavsky’s company arises only if I am wrong to conclude that no instructions to market the yacht were given by Mr Pisarev at the 11 May 2010 Amels meeting and that there was no implied contract. If there were no such instructions or implied contract, Mr Kulkarni accepts that Moran acted on its own initiative in showing the yacht to Mr Miliavsky and has no claim to commission. If, however, Moran was acting pursuant to Mr Pisarev’s instructions, the question arises whether Moran was an effective cause of the eventual sale to Mr Miliavsky’s company.
    1. The law on whether an agent or broker can be regarded as the (or an) effective cause of a transaction was not in dispute. It is summarised in Chitty on Contracts Vol. 2 (31st ed) para 31.145, as follows:

“Subject to clear indications to the contrary, where the agency contract provides that the agent earns his remuneration upon bringing about a certain transaction, he is not entitled to such remuneration unless he is the effective cause of the transaction being brought about. On this point there is a substantial body of case law, resulting from the use of words such as “find” or “introduce” a purchaser. Thus in Millar v Radford the plaintiff was retained by the defendant to find a purchaser of the defendant’s property or, if that was not possible, a tenant. A tenant was found and the plaintiff was paid his commission. Over a year later the tenant bought the property from the defendants. The plaintiff claimed commission although he had not been in any way concerned with the sale. The Court of Appeal held that he was not entitled to commission, since he had not brought about a sale and was not the effective cause of it taking place. The agent need not, however, be the immediate cause of the transaction, provided that there is sufficient connection between his act and the ultimate transaction. Thus, an auctioneer was instructed to sell the island of Herm by auction or otherwise, but the island failed to reach the reserve price at the auction. A potential buyer then asked the auctioneer for the name of the owner and, upon receiving it, purchased the island directly from him. It was held that the auctioneer was entitled to his commission. If the transaction which results in a sale is different from that which the agent was engaged to bring about, it will be a matter of construction whether the parties intended remuneration to be payable in the changed circumstances. If the agent was the effective cause of the ultimate transaction the court may make the necessary implication or may imply a new contract from the fact that the agent continued to act at the principal’s request towards completion of the new transaction. But if the ultimate transaction was of a wholly different nature from that contemplated or worked towards, the agent may not be entitled to remuneration. Thus, where an agent employed to find a buyer introduced a government department which then compulsorily acquired the property, he was not entitled to commission.”

    1. As Waller LJ put it in Nahum v Royal Holloway and Bedford New College [1999] EMLR 252, in order to satisfy the test of “effective cause” a claimant must show that “it was his actions that really brought about the relation of buyer and seller” between the two principals.

Mr Miliavsky’s 18 May 2010 visit

    1. It is common ground that Moran’s only relevant involvement with Mr Miliavsky was when Ms Tsareva showed him the yacht on 18 May 2010. If Moran was the effective cause of the eventual sale, that can only have been because of what it did on that occasion. In order to apply these principles to the facts of this case it is necessary to consider the rival evidence about that visit.
    1. The evidence about Mr Miliavsky’s visit to the yacht on 18 May 2010 came from Ms Tsareva, Captain Scott and Mr Miliavsky himself.
    1. Ms Tsareva’s written evidence was that the visit lasted for “several hours”, but in her oral evidence she said that it lasted for “definitely not less than an hour and a half”, during which she and Captain Scott showed Mr Miliavsky round twice. She said that he was very interested, saying that it was “the perfect yacht” for him, but was too expensive and that he would not pay more than €20 million, a price which she knew Mr Pisarev would not be willing to consider at that time. She said that she had told Mr Pisarev about Mr Miliavsky’s visit, but there was no documentary evidence to support that assertion and I do not accept it.
    1. Captain Scott’s evidence was also that the visit had lasted several hours (in cross examination he said two or three hours) that Mr Miliavsky was shown round twice and that he asked numerous questions, including about the yacht’s engines and generators and its performance in a seaway.
    1. Mr Miliavsky’s evidence (and the defendants’ case) is that he was not interested and made it clear that he was not interested in purchasing a yacht at this time as he already owned a yacht, the “MOSCA”, with which he was quite content, that he only agreed to go on board “4YOU” as a result of Ms Tsareva’s persistence, and that he spent very little time on board (no more than about 15 or 20 minutes looking round and a similar time having a cup of tea) and gave Ms Tsareva no reason to think that he was a potential buyer. He accepted that Ms Tsareva would have told him the price, but said that it did not register with him as he was simply not interested. He said that Ms Tsareva did not tell him that the yacht belonged to Mr Pisarev (whom he knew). Indeed Mr Miliavsky’s evidence was that he regarded Ms Tsareva as far too pushy in her approach and over familiar in her manner (using the familiar form of “you” in Russian on first acquaintance which Mr Miliavsky regarded as inappropriate).
    1. I accept Mr Miliavsky’s evidence on this issue.

Decision on effective cause

    1. In my judgment Moran was not the – or even an – effective cause of the sale of “4YOU” to Mr Miliavsky’s company. It was not Moran’s actions which really brought about the sale. I reach that conclusion for seven related reasons.
    1. First, the visit to the yacht on 18 May 2010 was short, perfunctory and, from Mr Miliavsky’s point of view, not serious. He was not interested at that stage in buying “4YOU” and did not seriously inspect the yacht with a view to purchase.
    1. Second, the long lapse of time between 18 May 2010 and December 2011, although not conclusive, suggests that the transaction discussed in December 2011 was in effect a new transaction and not the resumption of a transaction which had begun some 19 months beforehand.
    1. Third, the discussion of “4YOU” which began in the Moscow restaurant in December 2011 was in fact a new discussion. Mr Pisarev did not know that Mr Miliavsky had already inspected the yacht and did not (as Mr Kulkarni submitted he had) approach him because of that inspection.
    1. Fourth, Moran had no relevant contact with Mr Miliavsky after May 2010. If Ms Tsareva had thought he was a serious potential buyer as a result of his visit if only the price were reduced to something of the order of €20 million, it is surprising that Moran never attempted to contact him up to the time when its services were terminated in October 2011.
    1. Fifth, Mr Miliavsky’s own circumstances had changed materially between May 2010 and December 2011. In May 2010 he was not interested in buying a new yacht and did not have funds readily available to do so. In April 2011, however, he did buy a new yacht, but it was a 32.5 metre yacht called “PANTARAN” and not the “4YOU”. By December 2011 he had sold some businesses and as a result was cash-rich and in a position to consider another purchase.
    1. Sixth, although he remembered it, Mr Miliavsky did not rely on his visit to the yacht in making his decision to buy “4YOU”, but carried out his own inspection at Loano in Italy in January 2012. The two visits were different in character. In May 2010 Mr Miliavsky visited briefly, with no interest in buying. In January 2012 he inspected the yacht as a potential buyer.
    1. Seventh, the evidence suggested that wealthy Russians like Mr Pisarev and Mr Miliavsky are routinely circulated (bombarded might be a better word) by brokers with information about yachts which are for sale. It seems probable, therefore, that in the period between September 2010 and October 2011 when Moran was advertising the “4YOU” for sale, he would have been sent such information. If he was, he paid it no attention and showed no interest in it.
    1. In these circumstances I conclude that there was no sufficient (in fact there was very little) connection between Mr Miliavsky’s visit to the yacht in May 2010 and his purchase of it in January/February 2012. His visit was part of the history, but no more than that.


    1. In view of the conclusions reached so far, it is unnecessary to determine what would have been a reasonable commission rate. Although Moran began by claiming a rate of 10% in reliance on its standard terms, Mr Kulkarni rightly recognised in closing that this case could not be pursued in view of Paul Moran’s evidence. He relied on three pieces of evidence: first, a discussion between Moran and other brokers in the context of an offer then under consideration, in which the other brokers had sought clarification whether the price of €23 million proposed by Moran included commission of 8% or 10%; second, the proposed terms of the Junport deal, which had initially included commission of 9% which was then negotiated down to 5%; and third, Ms Tsareva’s e-mail stating that “the standard commission rate is 5%” (see [55] above). To this I would add Mr Pisarev’s evidence that commission was normally in the range of 3% to 5% of the price, as well as other references in the documents to rates of 2½% or even 1½%. Ultimately Mr Kulkarni contended for a figure of 5%.
    1. The material on which to base a conclusion in these circumstances is rather thin. It appears that commission would normally be the subject of discussion between the parties, so that much would depend on the circumstances of the market in general and the particular transaction being discussed. For example, a broker might be willing to accept a lower rate than usual rather than lose the deal altogether, and much might depend on whether there was a single broker involved or brokers acting for each party, in which case the commission would have to be divided between them, as in the case of the first and second of the three matters relied on by Mr Kulkarni.
    1. If it had been necessary to reach a decision about this I would have concluded, taking account of the evidence to which I have referred, that a fair and reasonable rate of commission for Moran would have been 4% of the sale price of €19.8 million, that is to say €792,000.


    1. Moran contends that Mr Pisarev is personally liable for the tort of inducing his company, Galaxias, to breach its contract to pay commission. Since I have found that Galaxias was not in breach of contract, this claim does not arise and it is unnecessary to say much about it.
    1. I would observe only that, even if Galaxias was in breach of contract for failing to pay commission, and even if Mr Pisarev knew this to be the case (knowledge that the act procured is in fact a breach of contract being an element of the tort: OBG Ltd v Allan [2007] UKHL 21[2008] 1 AC 1 at [39] to [41] (per Lord Hoffman) and [191] to [192] (per Lord Nicholls)), it would remain a case where all that had happened was that a company (Galaxias) had failed to make a payment which its ultimate beneficial owner, in accordance with whose instructions the company would act, knew to be due. To hold the beneficial owner liable in tort in such circumstances would appear to drive a fairly large hole through the principle of limited liability. However, it is on the facts of this case unnecessary to explore this point further.


  1. For the reasons given above Moran’s claim fails. It was not instructed to market the “4YOU” in May 2010 and, even if it had been, it was not an effective cause of the eventual sale to Mr Miliavsky’s company. There is no basis for a claim against Mr Pisarev personally.
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