Bailment

Question 1

What is the definition of Bailment?

Answer 1

A transfer of possession of goods by the bailor to the bailee on condition that the goods shall be returned to the bailor under the terms of the contract.

Question 2

AVX v EGM Solders 1982

Answer 2

The plaintiffs returned back defective goods back to the defendants (as agreed), the plaintiffs also returned by accident other extra goods that looked nothing like the original agreed goods. The duty of the involuntary bailee is not the same as the ordinary bailee, but they are obliged to act in good faith regarding the goods. Therefore the defendants were liable and should not have had the mistaken belief.

Question 3

What is Contractual bailment (A-B)?

Answer 3

A lends a car to B for a fee (bailment got reward). If contractual bailment and B is negligent, B would be liable to A for breach of contract.

Question 4

What are some examples of bailment?

Answer 4

Deposit if chattel with bailee for a purpose.
Carrier acting as a bailee to deliver goods to buyers premises
Hire if chattel paid for by bailee

Question 5

Newman v Bourne and Hollingsworth 1915

Answer 5

Principle: the finder of goods is a form of bailment that does not depend on a pre-existing contract.
A customer dropped her coat in the shop and forgot to take it; the shop owners assistant found it and kept it in the shop. The shop owner was liable as a finder of goods has the same duty of care that of a gratuitous bailee.

Question 6

What was held in The Pioneer Container 1994?

Answer 6

The obligation is created by the delivery and assumption of possession under a sub-bailment. The sub-bailees must be aware of the bailors interest in the goods, so as to become obliged to take due care of the goods bailed. The privy council endorsed challenges as to the consensus between the bailor and the bailee.

Question 7

What is non-contractual bailment?

Answer 7

When A makes a gracious loan to B. If B is negligence then B would be liable to A in the tort of negligence.

Question 8

What are the 3 requirements of Bailment?

Answer 8

1. Transfer of possession
2. Bailor retains ownership in the chattel and doesn’t pass it to the bailee
3. Bailees consent

Question 9

The first element - Transfer of possession

Answer 9

This is the delivery or transfer of the property in question by the owner or bailor to the bailee. Whether possession must be transferred depends on the facts of a case.

Question 10

Transfer of Possession - Ashby v Tolhurst 1937

Answer 10

A car parked in Ds car park was stolen by a thief. CA held that the possession of the car did not pass to the D. So there was not a bailment relationship but a licences and licensor. If the car park owners were bailees, they would still be liable. A bailment will not arise if the intention of the parties is that a completely different thing will be handed back by B to A rather than the identical thing in an altered form.

Question 11

Transfer of possession - Dixon v London Small Arms Co (1894)

Answer 11

Some necessary materials were provided by the Crown to an arms manufacturer in order to make rifles, using some additional material, for supply to the Crown. HL held that the manufacturer sold the rifles to the Crown, it was not a bailment. In a bailment, the basic nature of a chatter should not be changed.

Question 12

2. Bailor retains ownership in the chattel and does not pass to the bailee. What is the bailee and bailors ownerships?

Answer 12

The Bailor remains the owner during the period of the bailment and has a property right to the recovery of the chattel hailed and not a mere contractual right.
The Bailee acquires a proper a property right l, the special property in good which gives the bailee the right to the exclusive use and enjoyment of the goods bailed but merely for the purpose of the bailment. If the bailor wrongfully interferes with this enjoyment the bailee can sue in the tort of conversion.

Question 13

Mendelssohn v Normand (1970)

Answer 13

Here there was a delivery of possession and exclusive control due to the passing of car keys and therefore it was held to be a bailment.

Question 14

Ultzen v Nichols (1894)

Answer 14

A waiter took a customers coat and hat and put them away. The coat and hat went missing. The restaurant claimed that it was not a bailment, as they had merely put his coat and hat in a safe place. It was held it was bailment with the restaurant, the waiter decided where to put it after taking possession, different from when you enter a restaurant and a rail is provided for the customers to hang their own coats.

Question 15

Mercer v Craven Grain Storage (1994)

Answer 15

A grain storage society was the bailee of grain deposited by a number of farmers, even though the grain supplied by any one farmer was mixed with the grain supplied by others. Held There was an equivalent quantity of grain that was to be returned as it was a bailment. HL said that it’s possible to have bailment where the bailee is authorised to substitute other goods from those bailed

Question 16

What is the difference between a bailment and a loan of fungibles?

Answer 16

A bailor has a property right to the property bailed where as the lender has a merely a contractual right to the Reuther if equivalent property but not property because the identical property is not being returned.

Question 17

3. Bailees consent

Answer 17

The deliveree must agree to become bailee (ie the deliveree must agree to take possession of the property in question). A person cannot be a bailee against his/her will. Involuntary bailment is not true bailment.

Question 18

What are the three elements of Bailee’s Liability?

Answer 18

1. Duty of Care
2. Burden of Proof on bailee
3. Defence

Question 19

1. Duty of Care

Answer 19

The main duty owed by the bailee to the bailor is got the bailee to exercise reasonable care. If the chattel bailed is lost or damaged due to the bailees negligence, the bailed is liable to the bailor.

Question 20

Houghland v RR Low (Luxuary Coaches) Ltd 1962

Answer 20

Luggage on a coach was lost when transferred to another coach because of a breakdown of the first. Drivers of the first coach left unintended to for a few hours and allowed passengers unsupervised to collect their luggage from coach 1. It was held that the driver of the coach was not the bailee of the luggage. The gross negligence test was not applied as the reasonable care test applies to all type of bailment & there was not enough evidence for negligence against the defendants.

Question 21

CA in Sutcliffe v Chief Constable of West Yorkshire 1996

Answer 21

Otton LJ; No distinction is to be drawn between a gratitude bailment and one for reward. The standard of care required in a case depends on the circumstances of a particular case, a division into gratuitous bailment and a bailment for reward is not necessary.

Question 22

2. Burden of Proof on Bailee

Answer 22

The general rule if that if A claims damages for negligence from B, A must prove negligence.But in bailment the burden of proof reversed. The burden of proof is on the bailees to demonstrate that they were not negligent.

Question 23

Defence

Answer 23

The damage lost happened despite taken reasonable care.

Question 24

Coggz v Bernard (1703)

Answer 24

Old law - Classified bailments in different ways. Lord holy said if it was a gratuitous bailment (as in the bailee is not getting paid), then the standard of care is lower, where the bailment is found to be for the sole benefit of the bailee, a higher duty of care is expected. But if the bailment is for reward then the bailee was liable for ‘ordinary negligence’. But more recent cases no longer distinguish between negligences.