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Property Torts & Bailment Notes

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PROPERTY TORTS

&

BAILMENT

BAILMENT

• Definition: TRM Copy Centres v Lanwall Services UKHL 09 Lord Hope:
'bailment embraces all situations in which possession of goods is given by one person to another upon the condition that they shall be restored to the person by whom possession has been given, or deal with as he directs, upon expiry of the agreed period of possession'

• May be 'at will' (bailor has right to unilaterally terminate bailment) or fixed/determinable period

• Bridge: if pursuant to contract then contractual incidents, if no contract, rights in tort

• note: can have sub-bailment (may be a direct r/s between head bailor & subbailee)

• bailor = giver of possession, bailee = receiver
I) BAILOR HAD POSSESSION/RIGHT TO POSSESSION

• Not the same as ownership…

• Need factual possession (physical control) + intention to possess (or a right to it)

• Armory v Delamirie 1712 chimney sweep found jewel (took possession) then left with jeweller - bailment r/s created
II) BAILEE PUT INTO POSSESSION

• There is a fine line between assuming possession (bailment) & simply permission to leave something and land (a license)

• Bailment = the transfer of possession & voluntary acceptance of CL duty of safe keeping

• License = permission to leave & no responsibility - Odone v Hawarden
Services

• Ashby v Tolhurst C parked in D's carpark, where a thief drove the car away,
telling the attendant he had permission - C argued bailment & that D breached duties - held no - there was no transfer of possession!

• It was said it would have been difference if the car was left for D to sell or had the keys been given
III)
BAILEE VOLUNTARILY ACCEPTS POSSESSION OF PROPERTY BELONGING TO
ANOTHER

• It was previously thought that consent was needed from both parties but the current view is that the bailor's state of mind is irrelevant - only need the bailee to voluntarily assume possession - The Pioneer Container a) Voluntary assumption of possession

• Lethbridge v Phillips C lent paining to X, who lent it to D's son (wanting D
to see it). Son put it on mantlepiece, was damaged. C argued D was bailee no because was no voluntary assumption

• Note also the suggestion here of direct r/s with the sub-bailee b) Knowledge that the property belongs to another
Page 1 of 13 • Marcq v Christie's: 'If you are to owe duties to someone else you should know or at least have some means of knowing of their existence'

• Here T stole M's painting. X was the bona fide purchaser, who took to
Christie's (auctioneers). It was unsold when M discovered it & surf for bailment & conversion - held no bailment as C had no idea it belonged to M seems to lay down an objective test, but the result suggests a subjective one

• Its outcome must be correct - surely cannot owe obligations to someone you don't know

• But an objective test would appear to make ownership a requirement of bailment

• Although could explain it via a relativity of title theory i.e acknowledge that someone has a better possessory title than you
IV) GOODS MUST BE CAPABLE OF BAILMENT:

• Must be tangible property

• Must be able to return the exact same item - if object is money, only bailment if you can return the exact same note/coin

• Must be capable of ownership

• Taylor v Chester: half a £50 note - yes

• Dobson v North Tyneside HA: body parts which are preserved - yes (normally not body parts)

• Yearworth v North Bristol NHS Trust: doubted Dobson & considered theoretical discussion of ownership - gives owner control etc - statute meant Cs retained sufficient control over sperm to be owners of it

• Hoath v Connect Internet Services 06 Aus case - internet domain name -no intangible!
IV)RIGHTS

&

DUTIES

i) Bailee/bailor and third parties - e.g when T interferes with the property a) Bailee v T: e.g when T interferes with the property

• The Winkfield 1902 Collins MR 'as between bailee & stranger,
possession gives title - that is not a limited interest, but absolute and complete ownership'

• Thus bailee standing to sue in tort - here mail lost at sea due to T's negligence

• note Tort (Intereference with Goods) Act 1977 s.8 T can argue that there is someone with better title tan Bailee - Bailor joined in proceedings T will have to pay out but court will distribute it fairly between Bailee &
Bailor - not much of a defence!
b) Bailor v T: can also sue T under certain conditions

• Where bailor has immediate right to possession - can sue in full using property torts

• e.g O'Sullivan v Williams bf left car parked with gf, car damaged negligently by T, bf succeeded in claiming neg - had immediate right to possession

• Where bailor does not have immediate right to possession - if permanent loss/destruction bailor can sue, but not if only temporary damage - HSBC
Rail v Network Rail

• Here bailor has a reversionary interest - only claim if that interest permanently injured
Page 2 of 13 c) Duty to account: where bailee sues, must account to bailor

• The Winkfield would seem odd if Bailee (not absolute owner) could recover the full value of the chattel

• O'Sullivan v Williams suggests sometimes bailor will be under duty to account to bailee - CL ruled reinforced by s.3 T(IG)A 1977 d) Bailor & bailee's claims are mutually exclusive: if one succeeds, the other barred

• Avoids double liability - O'Sullivan v Williams

• reinforced by s.7(4) and 7(2) T(IG)A 1977 ii) Bailor & bailee

• If there is a contract, parties can sue under that & if exceed the terms of the bailment, can sue in property torts

• but these seem to be separate obligations… can sue for breach of bailment obligations a) Obligations of a bailee - per Mance LJ in East West Corp v DKBS

• 3 basic duties (i) not to commit conversion ii) abide by any contractual term
(iii) take reasonable care of the property & return it at end of bailment term

• Mance suggested (iii) was only one, created & explicable by separate bailemtn source of obligations b) Bailee's duty of care

• Southcote's Case 1601 obligation on Bailee = absolute - property stolen but still liable

• Coggs v Bernard 1703 softened the strict rule - the more the bailee benefits, the higher the standard of care

• Sutcliffe v CC West Yorkshire 96 'duty of reasonable care' - confiscated car boxed in but gates open, vandals got in and set fire - held fulfilled the standard

• Matrix Europe v Uniserve Holdings 09 chargers delivered to warehouse, stolen by T, held breach of bailment duty of reasonable care because didn't alert owners of wrongful delivery & security poor

• Note reverse burden of proof - we assume standard is not met & D must prove he did - Sutcliffe

• Deviation if Bailee goes outside terms of bailment, liable for any damage flowing from that

• Sub-bailment if there is a limitation/exclusion of liability between B & C
then it will apply in the A-C relationship where A has bailed in such a way as to allow B limit liability etc - The Pioneer Container c) Remedies available against bailee

• If sue in contract then will of course be contractual, if in tort then torts damages

• If sue in bailment is unclear - often will be tort damages

• but in Yearworth awarded contractual measure as so close to contact!
b) Rights of a bailee

• If incur a cost in maintaining the property then have a right to be compensated - The Kos (SC 12)
Page 3 of 13 IS

BAILMENT AN INDEPENDENT SOURCE OF OBLIGATIONS?

• Typically CL sources of obligations = contract, tort, restitution, UE

• With bailment, there will sometimes also be a contract, but at other times it looks more like tort/neg
I)

NO:

• Bridge: there was never any such thing as an action in bailment - but has emerged like UE - says unnecessary as contract and tort are adequate to deal with all the problems it throws up

• McMeel: says bailment a redundant concept which should be jettisoned

• Says it has inhibited the development of a rational law of personal property

• The concept is too elusive or over-inclusive to be of any normative significance

• Describes as an unnecessary straightjacket - confines potentially broad principles to chattels

• It downplays the deliberate contractual structuring of commercial relationships

• It has no autonomous legal content which cannot be better attributed to concepts of consent, wrongdoing, UE or property

• Lord B-W in Henderson v Merrett Syndicates 95 says bailee's duty of care just an application of the law of negligence - assumption of responsibility etc
II)

YES:

• Bell: it is an independent source of obligations: can thus sue for breach of bailment

• Though recognised it overlaps & applies in a restricted area

• McBain: says current law unsatisfactory but does consider it sui-genereis favours codification

• Notes Coggs v Bernard & Halsbury considered categories of Roman Law

• 'Real contracts' - favours using these as non-exhaustive list of where there will be bailment: depositum, mandatum, commadatum, mutuum, pignus,
locatio conductio

• Lord Dennings MR Building & Civil Engineering v Post Office considered it sui generis

• Mance LJ likewise in East West Corp v DKBS

• Otton LJ in Sutcliffe treated it as independent

• Historically considered independent e.g Coggs v Bernard

• Reverse burden of proof also unique - unusual in tort/contract

• Yearworth v North Bristol NHS Trust 09 sperm frozen etc, written agreement in which hospital agreed to take reasonable care - men suffered psych harm when hospital negligently allowed sperm to thaw - no consideration so no contract formed, and negligence failed because of the rules on psychiatric harm, but succeeded in bailment - gave damages akin to contract

• Kos SC 12: Lord Sumption & Lord Mance treated it as a distinct cause of action (from UE) - measure of recovery not necessarily the same

• Bailment would be compensation for actual loss (including opportunity cost)
whereas in UE subjective devaluation could mean much less - context =
expenses incurred
CRITICISMS OF THE LAW ON BAILMENT

Page 4 of 13

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