Grounds 1 and 2: the onus of proof and the application of the correct standard of proof by the Tribunal
- The appellant argued the Tribunal erred in law because it did not apply the correct onus of proof. The appellant argued that in cases of bailment for reward the bailee bears the onus to prove that the loss and damage was not caused by the bailee's negligence. The appellant submitted that in this case "the entire onus" was placed on the bailee and the Tribunal erred in not concluding that the respondent bore the onus to prove that when the artworks were collected by the it, they were already damaged or, if not, they did not cause the damage evident on delivery.
- It is helpful at this point to consider some relevant principles with respect to bailment. It can be accepted that, in this case, the respondent was a bailee for reward (see: Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 at 237-238 per Windeyer J). As a bailee for reward:
"[t]he obligation of a carrier as bailee is to exercise due care, skill and diligence for the safety of chattels entrusted to him. If he fails to deliver them safely at the end of the bailment, that is evidence of a failure to perform his duty to exercise due care of them. He can rebut this by shewing that their loss or damage was not the result of any default on his part. But to escape liability he must establish that. The burden lies on him…
Hobbs v Petersham Transport Co Pty Ltd , ibid at p. 240 per Windeyer J.
- The standard of care is that "that which a careful and vigilant man would exercise in respect of goods of his own of the same kind in similar circumstances": Hobbs v Petersham Transport Co Pty Ltd, ibid at 238.
- This principle, and the duty of care on a bailee, does not mean that the bailee has as the appellant phrased it the "entire onus". That is, there must be proof by the bailor of the condition of the goods at the time of delivery to the bailee. In Larsen v Grace Worldwide (Australia) Pty Ltd [No 2] [2015] NSWSC 1224, Schmidt J dealt with a case where the plaintiffs had entered into a contract with the defendant to transport their goods from NSW to Germany. The plaintiffs alleged that on delivery, there were toxic substances on some of the furniture, in breach of the contract of bailment, which caused them personal injuries. There were several causes of action dealt with by her Honour in the proceedings. On the question of onus, her Honour noted (at [58]) that the plaintiffs bore the onus to prove all the elements of their case, including that the toxic substances were placed on their goods after delivery to the defendant or whilst in its custody as bailee. Her Honour held (at [72]-[78]) that the evidence led by the plaintiffs did not establish this. For that reason (amongst others), the plaintiffs' claim failed.
- The decision of her Honour was affirmed in the Court of Appeal: Larsen v Grace Worldwide (Australia) Pty Ltd [2016] NSWCA 251. One of the grounds of appeal was that her Honour erred in concluding that the evidence did not establish that the toxic substances came onto the furniture whilst in the possession of the defendant. Macfarlan JA, with whom McColl and Basten JJA agreed, considered this issue at [16]-[19]. His Honour found that Schmidt J did not err in her conclusion on this point. His Honour referred to the fact that Schmidt J had rejected the evidence of the plaintiffs' as not credible or reliable. His Honour concluded (at [19):
"[19] In these circumstances, the appellants did not establish that the respondent breached its duty as bailee to take reasonable care to deliver the appellants' goods in Germany in the condition that they were in when received into its possession (see Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220; [1971] HCA 26 at 238-240). The evidence (other than that of the appellants) admitted of the possibility that the substances were on the dresser before the goods were shipped. On the other hand, and perhaps more obviously, the evidence suggested the substances may have been placed on the dresser subsequent to their delivery to the appellants in Germany, in the course of building renovations or otherwise. The appellants had the onus of proving that the goods were damaged whilst in the respondent's possession. If they prove that, the respondent would have been required to prove that it took reasonable care of the goods (ibid), but they did not do so." (bold emphasis added).
- Accordingly, in this case the appellant bore the onus of proving the condition of the goods when they were delivered to the respondent. As observed above, when the artworks were collected by the respondent, they had already been wrapped in bubble wrap. The respondent's employees could not see the condition of the artworks. As we have also referred to above, there was no evidence as to who wrapped the artworks, or how or where they were stored in the gallery prior to collection by the respondent. The evidence of the appellant that she had seen the artworks in an undamaged state whilst hanging on the walls of the gallery three days prior to the collection is not, in our opinion and having regard to the circumstances of this case, sufficient evidence of their condition as at the date of collection by the respondent. In circumstances where the artworks, which were large and required special care, were removed from the walls of the galley and wrapped and moved by persons unknown and in a manner not identified by the evidence, we do not think that the evidence of the appellant as to what she saw three days earlier is sufficient of itself to support an inference that the artworks remained in that condition when collected by the respondent. As the Tribunal found, there is the possibility that damage to the artworks occurred during the period when they were taken down from the walls of the gallery, wrapped and stored until collected by the respondent.
- In our opinion this finding was open to the Tribunal.
- We also do not accept the appellant's submissions that the Tribunal incorrectly applied the standard of proof. The appellant submitted that the Tribunal fell into error by reaching the conclusion that there was a "real prospect" or that "it is possible" that the artworks were damaged at the gallery before collection by the respondent. We reject that submission. As in Larsen, the appellant here bore the onus to prove the condition of the artworks on collection. The evidence, or more particularly the lack of evidence as to the manner in which the artworks were dealt with at the gallery in the three days following their removal from the walls, wrapping and storage, left open the possibility that they were damaged during that time. It was for the appellant to lead evidence to prove otherwise. She did not do so and, in our opinion, the Tribunal did not err in its finding.