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LAWCOMM 442 - Personal Property LN.docx
LAWCOMM_442_-_Personal_Property_LN.docx
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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 53
Don Lye
171346040
Case is a clear example of bailment providing a litigation advantage as opposed to
negligence.
5.4 D
EGREE
OF
P
OSSESSION
R
EQUIRED
FOR
B
AILMENT
In cases like Shipbuilders Ltd v Benson [1992] 3 NZLR 549 (CA), where bailment is
contested, the court will have to weigh up evidence as to whether there has been a
sufficient degree of possession required for bailment.
Factors:
o
Question of fact in individual circumstances.
o
The bailee’s ability to refuse to give goods back until the bailor has paid for it.
5.4.1.1.1
Acernus Aero Ltd v Vincent Aviation Ltd [2013] NZAR 795 (HC) at [44]-
[49]
53
Page 54
Don Lye
171346040
5.5 G
RATUITOUS
B
AILMENTS
AND
B
AILMENTS
FOR
R
EWARD
Historically (pre-Donoghue v Stevenson), the distinction was more significant.
Modern tendency to regard bailment as a situation where the court’s hands should not by
unduly tied as a result of the diverse circumstances in which bailment might arise.
The court is given a broad discretion and not tied down with a technical formula.
Historically, there was greater insistence on recognising the distinction.
o
If there was a bailment for reward, courts tended to apply contract reasoning
because consideration is necessary to furnish a contract.
o
If it is a gratuitous, the arrangement was considered non-contractual and the court
applied principles of torts.
The modern view is much more relaxed.
o
Certain cases say the distinction is irrelevant.
o
However, if you are acting for the bailor, strategically, if the bailment was for
reward, may assist your case to mention this because a bailment for reward may
well attract, at least in the judges’ mind, that a higher standard should apply.
The fact that consideration has been paid for the bailment – may raise the standard of
care that needs to be shown by the bailee – Peter.
o
Don – it would probably depend heavily on the context – especially if the bailee is a
professional who does bailment for a living vs a student taking a mug for free.
o
See below further.
Peter’s mug analogy.
o
Two identical mugs. One student looks after it for free and the other does for $1k.
Suppose agree and in both cases, mugs are possession of bailees. Peter suggests
that in the paid bailment – bailment for reward, should highlight this.
o
Because as we have seen before, we can talk about burden of proof and reverse
onus, ultimately it has to be fleshed out in terms of the court's precise placement of
the standard of care.
o
In respect of bailment for reward, a higher standard would apply, because you
would comparatively have higher expectations for the standard with which your
goods are cared for, than if it was a gratuitous bailment. The additional payments
not only had a different status which might suggest a commercial arrangement
where one pays to minimise their risk.
Whether it is a gratuitous bailment or bailment for reward.
o
Depends on whether the party who benefits from the bailment pay for that benefit?
o
Whether there is a reward is generally straightforward.
However, in cases where there is a paid service and a bailment arises
incidentally, may be less clear – such as where the bailment does not have a
separate or identifiable charge.
E.g. staying in a hotel, where the hotel takes your goods and put it in a safe.
E.g. a passenger in a coach – pay for the ticket, but are you considered to pay
for the luggage storage?
o
As a rule, if the bailment arises as part of a paid service – will be treated as a
bailment for reward. If it is an independent transaction, will be treated as a
gratuitous bailment -
Houghland v Low (Luxury Coaches) Ltd
[1962] 1 QB 694.
54
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