12. Bailment and Torts

Question 1

B&T in other areas

Answer 1

SOGA - If B wants to claim property has passed, B can’t just bring a claim for that, B must bring a tort claim (e.g. conversion), no cause of action to just assert property right

ROT/SR - If S gives B possession and retains title, B is bailee of S’s goods (bailment = transfer of possession not amounting to sale)

Question 2

People often forget to argue bailment

Answer 2

White & Withers - didn’t argue till HL

Yearworth - no one argued bailment

Question 3

Property rights

Answer 3

prima facie bind the rest of the world

• 3P might have a defence (s.22-26 SOGA)
• to assert right, C must claim D commits a tort (or UE)
• this is why the torts are strict liability (to protect C’s property right)

TO ASSERT PROPERTY RIGHT: USE CONVERSION OR TRESPASS

Question 4

Law Reform Commissioner 1971

Answer 4

3 torts protecting property rights in goods
- conversion
- detinue
- trespass
should be replaced with a single tort of intentional interference
(keep negligence for unintentional interference)

Question 5

Tort (interference with goods) act 1977

Answer 5

DID NOT MERGE THE 3 TORTS

• set up common rules for intentional torts (“wrongful interference with goods”)
• abolished detinue
• still separate torts

Question 6

STRICT LIABILITY

Answer 6

For intentional interference:

• Intention element is satisfied if D intends the act constituting interference
• doesn’t matter if D honestly believes D’s action was permissable

Question 7

Marfani v Midland

Answer 7

moral concept of fault plays no part

Question 8

Fowler v Hollins

Answer 8

persons deal with property in chattels at their own peril

Question 9

Farquarhson Bros v King

Answer 9

D (BFP purchaser of goods) purchased goods but S did not have authority to sell goods

D liable in conversion/trespass (even if no fault) because of intentional interference (intended the act of receiving the timber and dealing with it)
- STRICT LIABILITY

Question 10

BMW v Dhagwanni

Answer 10

D drove car to Romania (insurance did not cover Romania) and crashed

• D left car in Romania
• not a deliberate act (did not intend to crash)
• D was not trying to assert own ownership in car/act inconsistently by leaving the car in the garage

MAYBE NEGLIGENCE (if driver careless when accident happened)

Question 11

Kuwait Airlines v Iraqi Airways

Answer 11

Lod Nicholls: precise definition of universal application is “well nigh impossible” but 3 basic features:
ONE - D’s conduct is inconsistent with owner’s right
TWO - conduct is deliberate
THREE - conduct is so exhaustive it encroached on owner’s rights (excluding him from use or possession)

THREE is what separates conversion and trespass (nature of interference)

• here, Kuwait Airlines won
• Iraqi Airways = 3 requirements satisfied
• no need to show consequential loss just vindicating rights

Question 12

Fouldes v Wollaouby

Answer 12

took C’s horses off boat

NOT CONVERSION - not sufficiently extensive interference with rights

• D not claiming to exercise ownership
• C could go and get his horses
• D accepted C’s ownership, just moved it

YES TRESPASS

Question 13

Marq v Christie Manson

Answer 13

auctioneer fails to sell stolen goods on behalf of X (returns back to X)

NOT conversion

• returned goods back to X
• dealt with goods but did not sell

Question 14

Club Cruise v Dept. for Transport

Answer 14

excluding C from use is not sufficient in itself for conversion

MUST BE PHYSICAL INTERFERENCE for conversion

• notice given is in effect the same as impounding but not conversion because not physical interference
• this tort is about enforcing C’s property right not protecting against any interference with use

Question 15

Saunderson v Marsden

Answer 15

trespass = interfering with right itself (however slight)

DOES NOT require encroachment on ownership

Question 16

White & Withers

Answer 16

wife photocopied husband’s documents and gave to her solicitor (pre-divorce)

• TRESPASS
• Direct and immediate interference with C’s possession of documents
• procedure for divorce proceedings does not displace rules of tort

Question 17

Letang v Cooper

Answer 17

Denning MR - don’t use language of “direct” to divide trespass and negligence

to divide the two: INTENTIONAL and UNINTENTIONAL

Question 18

Marsden

Answer 18

if direct injury = trespass

but might be de minimis only nominal damages

Question 19

s.2(1) Torts Act

Answer 19

detinue is abolished

academic argument: detinue lives - it modified conversion and trespass in detention cases

Question 20

DETINUE

Answer 20

ONLY liable when D refuses to give it back (not just liable when keeping someone elses goods)

• good for C because of limitation period
• only a tort when C asks and D refuses

THIS ELEMENT IS NOW IN CONVERSION CASES when D is retaining possession when they shouldn’t

Question 21

Schwartzchild v Harrods

Answer 21

D had possession of C’s goods with C’s consent

• only liability when D refuses to return goods
• D’s intention to keep does not trigger liability in itself
• when intention is communicated, then liability arises

CONVERSION INTERPRETED to have DETINUE requirements in situations where D is retaining possession when they shouldn’t

Question 22

Spartan Steel v Martin

Answer 22

NEGLIGENCE IS ABOUT PROTECTING PHYSICAL THING, NOT USE

D carelessly caused power cut:
ONE - damage to C’s machinery and ingots processed at time of power cut
- D liable (careless interference with thing = liable)
- damages payable incl. sum to reflect profits lost due to physical damage

TWO - loss of profit due to C’s inability to process other ingots

• NOT liable (careless interference with intended use of thing = no liability)
• power cut caused no physical damage to those ingots

Question 23

MCC Proceeds

Answer 23

scale: (1) legal rights, (2) equitable rights, (3) personal rights

NO conversion for equitable rights

Question 24

Shell v Total

Answer 24

General rule: no recovery for PEL (don’t want complete strangers to be liable), only recover if legal property right

Exception: special relationship between D and the person suffering loss (Clark & Lindsell)

• here, C had no interest in land damaged
• Shell = legal owner (held on trust for C)
• EXCEPTION APPLIES because of special relationship
• FLAWED ANALYSIS: special relationship is not between D and person suffering loss, it is between C and the trustee

Question 25

Cogg v Barnard

Answer 25

Holt CJ broke down 6 categories of bailment

• even if voluntary but undertook responsibility, then must do it carefully (accepted responsibility)
• if D decides not to do it, D cannot be forced but if D does it, D has accepted responsibility

Question 26

The Winkfield

Answer 26

Bailee (post office) can sue D for full value of goods (Based on value of the right)

BUT bailee must pay money to bailor (possession is for bailor so proceeds from possession is for bailor)

• bailee has own property rights (through possession) so if 3P damages, bailee can sue 3P for damages

Question 27

Yearworth v NHS

Answer 27

sperm samples negligently damaged - property rights in samples?

• bailment: D accepted responsibility by doing it, so under DOC; possession triggers AOR
• analysed through standard negligence (but no ownership of sperm and no right to use it/decide what happens to it?)

Question 28

The Pioneer Container

Answer 28

D is under a duty to bailee as long as D knows it is someone else’s goods

BAILMENT: SB accepted possession of goods knowing it belonged to owner (not bailee) so assumed responsibility

• BUT SB can rely on exclusive jurisdiction clause (accepted goods on basis of EJ clause)
• Bailor gave permission for bailee to include this in a subcontract
• AOR limited
• burden on SB/B contract
• bailment made EJ clause bind owner (limited AOR of sub-bailee)