MFV Qavak: Twende Africa Group (Pty) Ltd t/a TAG Marine v MFV Qavak

Fisherman Fresh CC purchased the fishing vessel MFV Qavak from an Irish company, C & M Donohue Fishing Ltd, in August 2017. TAG Marine (appellant) was a ship broker that advertised the Qavak for sale on its website without obtaining authority from the owners. In August 2017, Mr van Heerden (acting for Fisherman Fresh) responded to TAG's advertisement and expressed interest in purchasing the vessel. TAG facilitated initial communications between Fisherman Fresh and Donohue Fishing, providing draft letters of intent and offers to purchase. The sale negotiations through TAG stalled when Donohue Fishing indicated they had other higher offers. Subsequently, Fisherman Fresh purchased the vessel through a different broker, executing a Memorandum of Agreement on 18 August 2017. On 26 January 2018, TAG arrested the vessel in Port Elizabeth Harbour claiming broker's commission. Fisherman Fresh applied to set aside the arrest.

• Whether TAG established a prima facie case for entitlement to broker's commission from Fisherman Fresh based on an express or implied contract of employment as broker
• Whether there was a tacit agreement between TAG and Fisherman Fresh that would give rise to a duty to pay commission
• Whether there was a 'limited exclusivity agreement' preventing Fisherman Fresh from using another broker
• Whether TAG had a brokerage agreement with Donohue Fishing that would entitle it to commission
• Whether Fisherman Fresh unlawfully interfered with TAG's alleged contractual relationship with Donohue Fishing
• Whether TAG's claims constituted valid maritime claims under the Admiralty Jurisdiction Regulation Act

The appeal was dismissed with costs. The arrest of the MFV Qavak was correctly set aside by the High Court.

A broker's entitlement to commission depends on proof of an express or implied contract with either the seller or buyer. No right to commission arises merely from involvement in negotiations, however successful. Where a broker advertises property for sale, potential purchasers responding to the advertisement are entitled to believe the broker represents the seller, and no contractual relationship arises between the broker and purchaser absent express agreement. The principle that a broker becomes 'agent for both parties' once their status is known relates only to their role as a channel of communication, not to commission entitlement. For a tacit contract to arise, the party must be aware of all relevant circumstances, their conduct must be unequivocal, and the contract must not extend beyond what was contemplated. A potential purchaser who deals with a seller through one broker is not precluded from subsequently dealing through a different broker unless they have expressly agreed to exclusivity.

The Court expressed doubt (without deciding definitively) whether a claim for damages for interference with a broker's contract with a third party would constitute a 'maritime claim' under the Admiralty Jurisdiction Regulation Act. The Court observed that TAG's conduct in listing the vessel without authorization from the owners was problematic and resulted in it appearing to be the seller's broker to purchasers, while appearing to be the purchaser's broker to sellers - falling 'between two stools'. The Court noted that ship brokers are in the same position as estate agents regarding the freedom of potential purchasers to deal through multiple brokers. The Court commented that a broker who becomes involved in a transaction 'without securing an agreement by either party to pay commission' will have no right to commission regardless of the transaction's success, describing such conduct as 'unwise'.

This judgment clarifies fundamental principles of ship brokerage law in South Africa. It reinforces that brokers have no entitlement to commission absent a contractual agreement with either the seller or purchaser. The case is significant for establishing that: (1) a broker advertising a vessel for sale without the owner's mandate cannot claim to be acting for potential purchasers who respond to the advertisement; (2) mere knowledge that one is dealing with a broker does not create a contractual obligation to pay that broker commission; (3) potential purchasers are free to deal with sellers through different brokers unless they have expressly agreed otherwise; (4) the principle from Benoni Produce regarding brokers as agents for both parties relates only to communication, not commission entitlement; (5) tacit contracts for broker's services will not be easily inferred and require clear, unequivocal conduct with full knowledge of relevant circumstances. The judgment protects purchasers from spurious commission claims by brokers who insert themselves into transactions without proper mandates.