Topics: Bailment, Contract, Possession Pages: 13 (2474 words) Published: March 8, 2013

DEFINITION: Voluntary assumption of possession of goods by one person (bailee) from another (bailor) for a definite or indefinite period, with an obligation to redeliver.

Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220, per Windeyer J at 238:

3 A bailment comes into existence

4 upon a delivery of goods of one person, the bailor,

5 into the possession of another person, the bailee,

6 upon a promise, express or implied, that

7 they will be redelivered to the bailor or dealt with in a stipulated way

Bailee must have possession:

Transfer of possession – distinguishes bailment from licence

1. Difficult to distinguish ( examples below.

Greenwood v Council of the Municipality of Waverley (1928): C not responsible for lost goods from locker at sheds at Bondi Beach. Locked but C not given key – just colored disc to match locker. HELD: possession had not passed to Council ( had merely let the locker to G.

Cf Ultzen v Nichols (1893): waiter took a customer’s coat and hung up behind customer. Missing. Question was it a bailment or just act of good nature? HELD: bailment.

Distinction between bailment and licence
• ‘...control over the subject chattels is the key to distinguishing between bailments and licenses. In the present case, the facts suggest that the plaintiff surrendered control of her goods to the defendants and a bailment relationship was created’: Robertson v Stang (1997) 38 CCLT (2d) 62

Car park examples:

Diverging views between distinction of licence to park and bailment.

Tinsley v Dudley [1951] 2 KB 18: Publican (hotel) not responsible for lost customer’s motorcycle in carpark that was unattended closed yard next to hotel.

UK cases: tend to regard as merely license: Ashby v Tolhurst [1937] 2 All ER 837 (‘owners are requested to show ticket when required’)

Aus courts more inclined to find bailment ie. Control over vehicle, esp where card or ticket presented upon return of vehicle: Council of the City of Sydney v West (1965)

Obligation to redeliver?

Motor Mart Limited v Webb [1958] NZLR 773, per Turner J: h/p agreement to buy truck.

‘A bailment does not necessarily entail upon the bailee the obligation of redelivering to the bailor the thing bailed.’

Types of Bailment

Lord Holt in Coggs v Bernard (1703):

• Gratuitous/reward (free or fee):

Deposit of goods for safekeeping eg. leave with bank

• Delivery of goods for work done on goods eg. repairs • Delivery of goods for loan eg. lend/hire car

Delivery of goods to be held as security for load (eg. pledge/pawn).

• Deposit of goods for safekeeping

Distinction between bailment and agency

Petrifond Midwest Ltd v Esso Resources Canada Ltd (1996) 42 Alta LR (3d) 157

Agent performs service for his Principal ( represents him to the outside world, can acquire rights for his Principal and subject Principal to liabilities.

Bailee does not represent the bailor. Merely exercises (with leave of the bailor) certain powers of the bailor in respect of his property.

Bailee has no power to make contracts on the bailor's behalf. Nor make the bailor liable for any acts he does.


PREV: gratuitous bailee only liable for “gross negligence”

NOW: all bailees have duty – different degrees: Houghland v RR Low (Luxury Coaches) Ltd: P passenger on D coach had suitcase lost. Held gratuitous bailment.

3 To take reasonable care of the goods: Tottenham Investments Ltd v Carburettor Services Pty Ltd)

4 Not to depart from the scope of the bailment

5 To return the goods or deal with them as directed: Mitchell v London Borough of Ealing

6 Not to dispute the bailor’s title to the goods (NB just tertii)

7 Onus of proof is on the bailee (to demonstrate absence of negligence): Houghland v RR Low, Bowden

Reasonable Care

Depends on:

2 GOODS: value of the...
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