Bailment

The rightful possession of goods by one who is not the owner

Bailment what it isn t

Not a contract, but might have a contract involved Not a tort, but tortious conduct might be involved Not a sale, because the goods are only temporarily in the bailee s possession Not a licence, because obligations are imposed on the bailee in a bailment

Bailment
Transfer of legal possession (delivery) of personal property to a bailee temporarily For a specific purpose Goods to be returned to the bailor (or a 3P if bailor so directs)

Types of Bailment
Coggs v Bernard (1703) 6 forms of bailment (borrowed from Roman law) Duty of care and levels of liability vary depending upon the type of bailment

Levels of Liability - Ziff

Mutual Benefit Duty of care owed by bailee Bailee benefit Gratuitous Bailment Bailor benefit Involuntary Bailment 0 1 2 3 4 5

Bailee for reward

Bailment - Remedies
Contract Damages for breach Limited by privity of contract Exclusion clauses may limit liability Tort Damages for injury Limited to those to whom a duty of care is owed Bailment Return of the good or damages Can pursue claim against sub-bailees Exclusion clauses may limit liability

Is this a Bailment? - Delivery

Bailor voluntarily transfers possession of the good to the bailee temporarily Generally, Bailee accepts possession of the good, but sometimes the Bailee is in possession of the good involuntarily THE QUESTION: Does the putative bailee have such intent and physical control over the good so as to have possession of the good?

Is this a Bailment? Delivery to bailee? If No Is it a licence?

If no, may only be a licence see Ashby v Tolhurst; e.g. park at city meter Without the licensor s permission, the leaving of the good would be trespass No obligations on licensor to be vigilant against theft or damage Licensor may not steal or detain good or cause damage by positive act

Is this a Bailment? Delivery to bailee? If yes Is it a sale?

If yes, but the possession of the good has passed permanently then no bailment exists It is a SALE see Crawford v Kingston [1952]

Crawford v Kingston [1952]

The plaintiff gave him cows and agreed that Murray could from time to time sell and replace any of the cows long as there was returned to the plaintiff the number of cattle originally agreed upon Murray did, during a period of six years, sell and replace some of the cows and this was done with the knowledge and concurrence of the plaintiff.

Crawford v Kingston [1952]

The Issue: The substantial question for determination is whether the transaction was a bailment or a sale. Delivery of cows had occurred. Was Murray the beneficial owner of the stock or did he merely have possession as bailee while the property remained in the plaintiff?

Crawford v Kingston [1952]

When the original chattel delivered is to be returned in the same or an altered form the title does not pass but the transaction constitutes a bailment with the title in the bailor, If the transaction . . . permits the possessor to return another chattel of equal value or to pay the money value thereof, the relation of vendor and purchaser is created and the title to the property passes to him and is in him.

Crawford v Kingston [1952]

The essential difference between bailment and sale is the locus of the title. Who is bearing the risk of loss?

Crawford v Kingston [1952]

It is not upon the exercise of dominion, not subject to control, but upon the fact of having such dominion that beneficial ownership depends. Murray, having such dominion in the property of the cattle, was not bound to exercise it in any particular way or at any particular time, but his having had such power to use the stock as his own and for his own purpose and profit is wholly irreconcilable with the notion of acting as a bailee rather than that of beneficial owner.

Crawford v Kingston [1952]

Cases cited in favour of a SALE:
Carpenter v Griffin (1841) (lease of farm included cows of equal age & quality to be returned at end of lease); Reed v Abbey (1873) (1869 - sheep in as good condition & age as when taken to be returned in 1871) had the right to dispose of the animals and to subject them to seizure and sale for his debts

Crawford v Kingston [1952]

Cases cited in favour of BAILMENT: Busse v Edmonton Grain & Hay [1932] (grain stored receipt under Canada Grain Act same quantity, grade & kind of grain to be returned whenever required by bailor insured by bailor bailee used some rest burned insurance proceeds to bailor Note: specifically a bailment under the ACT

Crawford v Kingston [1952]

. . . the Court [found] that the legal title passed to Murray so as to give him the right to dispose of the cattle and to subject them to seizure and sale for his debts HELD: SALE by Crawford, NOT BAILMENT OF COWS to Murray

Bailment? Or Licence?
In order for there to be a bailment, the care and control of the good must be transferred to the bailee If the control is not transferred, then there is no bailment --- only a licence A licence can be created by express words as in Ashby v Tolhurst

ASHBY v TOLHURST
[1937] (COURT OF APPEAL)

"Received 1s. The proprietors do not take any responsibility for the safe custody of any cars or articles therein nor for any damage to the cars or articles however caused. ... all cars being left in all respects entirely at their owners' risk. Owners are requested to show ticket when required."

Ashby v Tolhurst
Facts: Plaintiff parked his car in the lot where there was an attendant. Though he had locked the car before leaving it, access could be obtained by putting a hand through the windscreen and it could be driven away. [Later] The car was not there. the attendant said that he had just given the car to the plaintiff's friend .

Ashby v Tolhurst
Plaintiff argued: 1.handing over of the car by the defendants' servant to a stranger without production of the ticket was a conversion by misdelivery; 2. the proprietors could not divest themselves of the position of bailees with words alone; 3. in the circumstances the conditions of the receipt did not exempt the defendants from liability.

Ashby v Tolhurst
Defendants argued: 1. There was a contract & it was not bailment 2. Its terms were contained in the receipt given the plaintiff and posted on the lot 3. The relationship of the parties was licensor & licensee on the terms contained in the conditions 4. The car was left at plaintiff s own risk and the owners of the parking ground were exempt from liability.

Ashby v Tolhurst
At trial, the parking ground owner lost. The court held the car was bailed to the lot and the attendant s misdelivery was conversion. The defendant appealed that decision.

Ashby v Tolhurst
Defendant Appellant Argued: 1. The plaintiff must be taken to have left the car on the parking ground at his own risk and to have paid only for a licence to do so, so that no liability was imposed on the proprietors of the car park. 2. If it was a bailment, then the conditions on the ticket suffice to relieve the defendants from all liability

Ashby v Tolhurst
Plaintiff Respondent Argued: The fundamental question here is, what was the relation between the parties? 1. There was clearly a contract of bailment or, at any rate, that there was sufficient evidence to entitle the county court judge to draw the inference that this was so. 2. The defendants admitted the deposit of the car and the attendant's negligence. The admission of negligence connotes certain duties.

Ashby v Tolhurst
Plaintiff Respondent further argued: 3. About the conditions on the ticket: a) It is inconsistent with the relationship of licensor and licensee that the defendants should require the protection of the conditions, but entirely consistent with the relationship of bailor and bailee. b) The conditions are not enough to relieve the defendants from liability for the negligence of their servant: see London and North Western Ry. Co. v. Neilson [1922] 2 A. C. 263, 271

Ashby v Tolhurst
What did the plaintiff respondent say the words on the ticket meant if not a license? 1. the car is left at the owner's risk cannot mean anything but the risk of accidental loss. It should not cover such a risk as that the defendants' servant should give away the car to a stranger. That was not contemplated. 2. The words of the conditions in the ticket are general words and not sufficient to give protection from liability in all circumstances.

Ashby v Tolhurst
THE JUDGMENT: The first thing to do is to examine the nature of the relationship between the parties Was it a bailment of the car or merely a licence granted by the defendant for the plaintiff to leave the car in the defendant s place?

Ashby v Tolhurst
The court considered 1. If the giving of a ticket signified the possession of the car had passed to the parking ground and 2. The significance of the words on the ticket both as they apply to the creation of the relationship and to the limiting of liability

Ashby v Tolhurst
HELD: (on the question of whether possession passed) It would be rather a surprising result if, when a man left his car on land like this and paid 1s. for the privilege of doing so, possession passed in a way in which it certainly would not pass if he left it in a public park in a square in London and paid the attendant 6d. for the ticket. In such a case possession, it seems to me, clearly would not pass; I quite fail to see why possession should pass in a case such as this.

Ashby v Tolhurst
Romer, J.: The defendants made it as clear as writing can make it in the ticket which was delivered to the plaintiff that they would not take any responsibility for the safe custody of any car

Ashby v Tolhurst
Held: (looking at the ticket given the Plaintiff) Reading the document as a whole, including its own description of itself, namely "Car park ticket," it really means no more than this: the holder of this ticket is entitled to park his car in the Seaway Car Park, but this does not mean that the proprietors are going to be responsible for it.

Ashby v Tolhurst
Held further:
The relationship was a relationship of licensor and licensee alone That relationship carries no obligations on the part of the licensor towards the licensee in relation to the chattel left there

Ashby v Tolhurst
OBITER: (because the court decided it was a licensee-licensor relationship) Even if the true relationship of the parties was that of bailor and bailee, the obligations normally imposed upon a bailee may be cut down to the extent, and only to the extent, that the conditions on a ticket prescribe.

Ashby v Tolhurst
Interpreting the words on the ticket (if it were a bailment):

Those words would permit a negligent custody, they protect the bailee in a case where damage is negligently done to the car by himself or by his servant. . . . impose no obligation on the bailee to provide an attendant to look after the car . . . impose no obligation on the bailee or his attendant, if he provided one, to take any active step whatsoever to prevent somebody from removing the car who had no title to remove it, even if it was done under the eyes of the bailee or the eyes of his attendant.

The Ashby v Tolhurst ticket said

"Received 1s. The proprietors do not take any responsibility for the safe custody of any cars or articles therein nor for any damage to the cars or articles however caused. ... all cars being left in all respects entirely at their owners' risk. Owners are requested to show ticket when required."

The power of the Ashby v Tolhurst wording on the ticket

Is the language of the conditions sufficient to protect the defendants? Green, J: In my opinion it is wide enough to protect the defendants not merely in respect of the acts of third persons but in respect of the acts of their own servants.

Ashby v Tolhurst wording

if the owners of the park put their servant there, even if they put him there with instructions to see that he does not hand over the car to anybody but the true owner, and if the servant in the performance of that duty performs it negligently, and, acting under a misapprehension which a little more care might have prevented, hands over the car to the wrong person, that. . . is one of the risks which, on the true construction of this document, the car owner takes.

The power of the Ashby v Tolhurst wording on the ticket

Admitted by the defendant: If the attendant standing a yard away from the car saw somebody who they knew had no title to do so removing it, they would be under no obligation whatever to move one finger to stop it.

Ashby v Tolhurst the obiter

Green, J: Assuming, (contrary to my view), that there is a contract of bailment, the owners of the park are exempt from liability if, when the car is delivered out of their park (assuming always that it was delivered), it is negligently delivered to the wrong person. That is the way in which I think these conditions should be construed.

The Ashby v Tolhurst legacy

Later parking lot owners who wanted to limit their liability relied on the wording from the Ashby v Tolhurst ticket. The court construes exculpatory clauses strictly against those who are trying to rely on them to limit liability.