LAWCOMM 442 - Personal Property LN.docx-...
LAWCOMM_442_-_Personal_Property_LN.docx-Don Lye 171346040 LAWPUBL 442: PERSONAL
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LAWCOMM 442 - Personal Property LN.docx-Don Lye 17...
LAWCOMM_442_-_Personal_Property_LN.docx-Don Lye 171346040 LAWPUBL 442: PERSONAL
LAWCOMM 442 - Personal Property LN....
LAWCOMM_442_-_Personal_Property_LN.docx-Don Lye 171346040 LAWPUBL 442: PERSONAL
Page 75
Don Lye
custody the goods of the owner and so assumes towards the owner the
responsibility of a bailee, then to the extent that the terms of the sub-bailment are
consented to by the owner, it can properly be said that the owner has authorised
the bailee so to regulate the duties of the sub-bailee in respect of the goods
entrusted to him, not only towards the bailee but also towards the owner
Qualification – that the sub-bailee must at least know that the goods belong to a third
party rather than the head bailee.
“a sub-bailee can only be said for these purposes to have voluntarily taken into his
possession the goods of another if he has sufficient notice that a person other than
the bailee is interested in the goods
so that it can properly be said that (in addition
to his duties to the bailee) he has, by taking the goods into his custody, assumed
towards that other person the responsibility for the goods which is characteristic of
a bailee.”
“[The sub-bailee] can invoke against the owner terms of the sub-bailment which the
owner has actually (expressly or impliedly) or even ostensibly authorised
. In the last
resort the sub-bailee may, if necessary and appropriate, be able to invoke against
the bailee the principle of warranty of authority.”
Where consent is very wide, only unusual or unreasonable terms will be impliedly
“where, as here, the consent is very wide in its terms, only terms which are so
unusual or so unreasonable that they could not reasonably be understood to fall
within such consent are likely to be held to be excluded.”
On the facts.
“First, by way of introduction, it is common in the present context for an exclusive
jurisdiction clause to be coupled with an express choice of law clause, often
contained (as here) in the same contractual provision, and usually providing for the
law of the chosen forum to be the law governing the contract.”
“Second, a provision in this form is by no means uncommon in shipowners' standard
forms of bill of lading;”
“Third, their Lordships do not consider that it can possibly be said that the
incorporation of such a clause in a bill of lading is per se unreasonable. In this
connection, they refer again to the difficulties, described earlier, which may arise if
bill of lading holders are free to pursue their claims in various jurisdictions
throughout the world; and they do not overlook the fact that, in common law
countries, a stay of proceedings to enforce an exclusive jurisdiction clause is a
matter for the court's discretion.”
Concludes that “the incorporation of the relevant clause in the sub-bailment would
be in accordance with the reasonable commercial expectations of those who
engage in this type of trade”.
As such, the sub-bailee was able to invoke the exclusive jurisdiction clause against
the head bailor (owners) and a stay of proceedings was granted.
Commentary (see next page)
The PC essentially endorses the views of the EWCA in
Morris v Martin
Ostensible authority
Devonshire suggests that what the PC is saying here, is that the sub-bailee can
potentially rely on the ostensible authority of the sub-bailor(head bailee) to enter
into contracts on behalf of the head bailor.

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