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[1999] QCA 232
General information, not legal advice.
Court of Appeal (Qld)
1999-06-22
Followmont Transport P, Premier Group P, Pincus JA, Moynihan J, Atkinson J
Original judgment source is linked above.
1 Johnson & Johnson Medical Pty Ltd ("Johnson") and Multigate Medical Products Pty Ltd ("Multigate") retained the respondent The Premier Group Pty Ltd ("Premier") to provide freight services for the delivery of their medical supplies ("the goods") to hospitals and medical practitioners throughout Australia. When the respondent took possession of those goods it became a bailee of the goods. For distribution in Queensland, the respondent ordinarily used the services of Express Distribution Services Pty Ltd ("Express"). When the goods were delivered to Express it became a sub-bailee of the goods. Express subsequently delivered them to the appellant for ultimate delivery to hospitals and medical practitioners north of the Sunshine Coast. The appellant Followmont Transport Pty Ltd ("Followmont") was therefore a sub-sub-bailee of the goods. Because Express owed it a considerable amount of money, the appellant wrongfully retained the goods to be delivered after demand for their return by the respondent. The respondent sought return of those goods in an action in detinue. In doing so, it in effect argued that it determined a revocable bailment.
2 A number of matters were traversed in the decision by the learned chamber judge. The only matter to be determined on the hearing of the appeal, as succinctly stated by Ms Philippides of counsel for the appellant, was whether the respondent Premier had an immediate right to possession at the time of the wrongful detention such as to found a right to sue the appellant in detinue. The appellant submitted that the immediate right to possession which must be shown must arise from some property or some special property in the goods in order to satisfy the prerequisites to sue in detinue; whilst it was true that special property existed in the case of a bailee who had an immediate right to possession because of some direct bailment of the goods, the question here was whether Premier, the respondent, the first bailee in the chain, would have a sufficient immediate right to possession arising from special property in the goods where there was an intermediate bailee between it and the ultimate sub-bailee of the goods.
3 In Morris v CW Martin & Sons Ltd[1] the English Court of Appeal held that an owner of goods, even if he or she had no right to immediate possession, was able to maintain an action for negligence directly against a sub-bailee. The theoretical basis for Lord Denning's decision in Morris v CW Martin & Sons Ltd[2] was a passage in Pollock and Wright "An Essay on Possession in the Common Law":[3]
"If the bailee of a thing sub-bails it by authority, there may be a difference according as it is intended that the bailee's bailment is to determine and the third person is to hold as the immediate bailee of the owner, in which case the third person really becomes a first bailee directly from the owner and the case passes back into a simple case of bailment, or that the first bailee is to retain (so to speak) a reversionary interest and there is no direct privity of contract between the third person and the owner, in which case it would seem that both the owner and the first bailee have concurrently the rights of a bailor against the third person according to the nature of the sub-bailment."
The passage was again referred to with approval by Lord Pearson delivering the judgment of the Privy Council in Gilchrist Watt and Sanderson Pty Limited v York Products.[4]
4 In this case where there are four parties and none of the bailments have determined, each of the superior bailors have concurrently the rights of a bailor against the fourth person, who in this case is the appellant. The respondent became a bailor of the goods as well as remaining a bailee to the owners. Its bailee, Express, in turn bailed the goods to the appellant. It was conceded that the appellant knew about the respondent's being a superior bailor to itself. There was therefore a chain of bailments.[5] The Pioneer Container[6] puts it beyond doubt that a sub-bailee of goods is liable as bailee to the owner of goods even though there is no contractual[7] relationship between them, where the sub-bailee knows or is taken to know of the owner. In this case the sub-bailee had actual knowledge of the existence of the bailor who was not the owner. As Diplock LJ put it in Morris v CW Martin & Sons Ltd,[8] it brings into existence "the relationship of bailor and bailee by sub-bailment". It is because of this that the owner can prove the bailment upon which he relies when he proceeds directly against the sub-bailee[9].
5 In this case the owners of the goods are the bailors of the goods to the respondent, Premier, the respondent is the bailor of the goods to Express, who is the bailee to Premier and sub-bailee to the owner. Express, in bailing the goods to the appellant Followmont, is bailor to Followmont who is a bailee to Express, a sub-bailee to the respondent Premier and sub-sub-bailee[10] to the owners. The ultimate bailee, the appellant in this case, is in a bailment relationship with each of the bailors of the goods, the owners, Premier and Express.[11]
6 The question to be determined on this appeal is whether the first bailee can maintain an action in detinue[12] against its sub-bailee. As can be seen this sub-bailment itself gives rise to a relationship of bailment.[13] The first bailee as bailor to its sub-bailee has demanded return of the goods and there has been an unlawful failure to deliver up those goods when demanded.[14] This terminated the bailment[15] and gave rise to a right to sue in detinue.[16]
7 The right to sue in detinue[17] does not depend on ownership but a higher possessory right than the person from whom return of the goods is sought. A right to immediate possession is sufficient to justify proceedings in detinue.[18] Such a possessory right might be a right of possession arising out of some special property such as the revived reversion of a principal bailee.[19] A right to possession is relative and not absolute [20] and depends on a superior possessory right, such as that of a finder[21] or even a thief as against a dispossessor who is not the true owner.[22] A bailee, such as the respondent, whose bailment has not been determined has custody of the goods which gives rise to its right to immediate possession of the goods.[23] The Pioneer Container is not distinguishable on the basis that the plaintiff was the owner as the right to sue in detinue does not depend on proof of ownership.[24] Accordingly, when seen in this light, The Pioneer Container is authority for the proposition that any party having a superior possessory right can maintain an action in detinue against a sub-bailee[25] with whom it is not itself in a contractual relationship.[26]
8 As Premier had a superior possessory right and had made demand for the return of the goods which had been wrongfully refused, it could maintain an action in detinue against its sub-bailee, Followmont.
[3] Oxford, Clarendon Press, 1888 at p.169.
[4] [1970] 1 WLR 1262 at 1269.
[5] Westpac Banking Corporation v Royal Tongan Airlines (1996) Aust Torts Reports 81-403 at 63,658.
[7] A contractual relationship is not necessary for bailment: Pollock and Wright at p.163-164.
[9] The Pioneer Container (supra) at 341.
[10] Spectra International PLP v Hayesoak Ltd [1997] 1 Lloyd's Law Reports 153 at 156, applies The Pioneer Container principle to a sub-sub-bailment in the carriage of goods; see Clarke, M., "Transport (Land)", [1997] JBL 590.
[11] This places the law of bailment in the realm of torts as well as contract: Tay, A E-S, "The Essence of Bailment: Contract, Agreement or Possession?" [1966] SydLawRw 3; (1966) 5 Sydney Law Review 239 at 243. Certainly it is not necessary for there to be privity of contract for a right of action to arise. The lack of contract between the respondent and appellant is therefore not fatal to the assertion of a bailment relationship between them. As Professor Tay says at p.244: "It is by entering into a relationship with a thing, and not by entering into a relationship with a person, that the defendant becomes subject to duties". A bailee has a duty to safeguard and redeliver on termination of the bailment.
[12] Now abolished in England by the Torts (Interference with Goods) Act 1977 s.2(1).
[13] Fisher, S., "Carriage of Goods and Sub-Bailment on Terms - the Pioneer Container", (1995) 25 QLSJ 33 at 40.
[14] Gledstane v Hewitt (1831) 1 C & J 565 at 570; [1831] EngR 93; 148 ER 1548 at 1549 per Bayley B; Cullen v Barclay (1881) 10 LR Ir 224; King v Walsh [1932] IR 178; Alicia Hosiery v Brown Shipley [1970] 1 QB 195 at 207 per Donaldson J; Ball v Sawyer-Massey Co Ltd [1929] 4 DLR 323; Schentag v Gauthier (1972) 27 DLR (3d) 710; Lloyd v Osborne [1899] NSWLawRp 24; (1899) 20 LR(NSW) 190; Gollan v Nugent [1988] HCA 59; (1988) 166 CLR 18 at 25 per Brennan J.
[15] Fenn v Bittleston [1851] Ex.152 at 159 per Parke B.
[16] Pollock and Wright (supra) at p.166; North General Wagon & Finance Co v Graham [1950] 2 KB 7 at 15 per Cohen LJ. As to the relationship between bailment and detinue see Tay, A E-S, "The Essence of Bailment: Contract, Agreement and Possession" [1966] SydLawRw 3; (1966) 5 Sydney Law Review 239 at 240; City Motors (1933) Pty Ltd v Southern Aerial Super Service Pty Ltd [1961] HCA 53; (1961) 106 CLR 477 at 491 per Windeyer J.
[17] Jones v Dowle [1841] EngR 1028; (1841) 9 M&W 19; 152 ER 9; Mason v Farnell [1844] EngR 268; (1844) 12 M&W 674; 152 ER 1369; Clements v Flight [1846] EngR 1084; (1846) 16 M&W 42; 153 ER 1090; General & Finance Facilities Limited v Cooks Cars (Romford) Limited [1963] 1 WLR 644.
[18] Healey v Healey [1915] 1 KB 938 at 940; Alicia Hosiery v Brown Shipley (supra) at 207; Minichiello v Devonshire Hotel (1967) Ltd (No.2) (1977) 79 DLR (3d) 656 at 661; Penfolds Wines Pty Ltd v Elliott [1946] HCA 46; (1946) 74 CLR 204 at 226-227 per Dixon J, 221 per Starke J and cf 215-217 per Latham CJ; Bolwell Fibreglass Pty Ltd v Foley [1984] VicRp 8; [1984] VR 97 at 99 per Young CJ;.
[19] Pollock and Wright (supra) pp.132-133; Palmer, N.E., "The Abolition of Detinue" [1981] Conv. (NS) 62 at 65; North General Wagon & Finance Co Ltd v Graham [1950] 2 KB 7 at 14 per Asquith LJ; Jarvis v Williams [1955] 1 All ER 108; [1955] 1 WLR 71 at 74 per Evershed MR; Singh v Ali [1960] AC 167 at 177; The Jag Shakti [1986] 1 AC 337 at 345; Minichiello v Devonshire Hotel (1967) Ltd (No.2) (supra) at 661; City Motors (1933) Pty Ltd v Southern Aerial Super Service Pty Ltd (supra) at 483-484 per Dixon CJ, 487 per Kitto J, 490-491 Windeyer J; Perpetual Trustees & National Executors of Tasmania Ltd v Perkins [1989] Aust Torts Reports 80-295 at pp.69,201- 69,202, 69,203 per Green CJ.
[20] Palmer, NE, Bailment (2nd ed) at p.244.
[21] Armory v Dalamirie (1722) 1 Strange 505; [1722] EWHC KB J94; 93 ER 664; The Winkfield [1902] P 42 at 60 per Collins MR; Kowal v Ellis (1977) 76 DLR (3d) 546; Perpetual Trustees & National Executors of Tasmania Ltd v Perkins (supra) at 69,205 per Neasey J.
[22] Singh v Ali (supra) at 176-177; Parker v British Airways Board [1982] 1 All ER 834; [1982] 2 WLR 503 at 505-506, 513 per Donaldson LJ; Richard v Nowlan (1959) 19 DLR (2d) 229; cf Buckley v Gross [1863] EngR 225; [1863] 3 B & S 566 at 571; [1863] EngR 225; 122 ER 213 at 215; Thackwell v Barclays Bank Plc [1986] 1 All ER 676 at 689.
[23] The Winkfield [1902] P 42 at 54-55 per Collins MR.
[24] See for example Flack v NCA (1997) 150 ALR 153 at 156 per Hill J, affirmed in [1998] FCA 932; (1998) 156 ALR 501; Bolwell Fibreglass Pty Ltd v Foley (supra) at 99 per Young CJ.
[25] The bailee is itself precluded from pleading the jus tertii against a bailor (i.e. that the goods belong to someone other than the bailor): Biddle v Bond [1865] EngR 269; (1865) 6 B & S 225; 122 ER 1179; Glenwood Lumber Co Ltd v Phillips [1904] AC 405 at 410-411.
[26] It is not necessary in this decision to canvas the problems raised by The Pioneer Container with regard to exemption clauses and sub-bailment on terms: WMC Engineering Services Pty Ltd v Brambles Holdings Ltd (unreported, Western Australia Supreme Court, Wheeler J, 31 October 1997) at 8-11; cf Westpac Banking Corporation v Royal Tongan Airlines (supra) 63,654 - 63,657, 63,660.
Followmont Transport P/L
Premier Group P/L [1999] QCA 232
(1997) 150 ALR 153
(1998) 156 ALR 501
(1946) 74 CLR 204
(1988) 166 CLR 18
(1961) 106 CLR 477