Freight paid to wrong party

For a number of months a ship broker made hire payments under a time charter directly to the owner, although the broker had previously dealt with the ship's manager. When the broker received an instruction from the manager to pay hire to a different account, he therefore complied with this request. Shortly afterwards the broker received another message directly from the owner demanding that the hire be paid to him. When the broker informed the owner that the hire had been remitted in accordance with the manager's instructions, the owner replied that the ship was no longer managed by the same manager, who had no authority to alter the payment instructions. The broker had therefore become a party to the manager's fraud and faced a claim from the owner for reimbursement of the freight that had been wrongly remitted.