Sydney City Council v West

The clause in question appeared on a ticket which was said to have been handed by an attendent to the respondent as he drove his vehicle in a stream of traffic past a checkpoint at the entrance to the parking station. He was told by the attendant to "follow on the traffic" as the ticket was handed to him. He said that he put the ticket in his pocket without reading it and ultimately arrived in a section of the station where he was directed to put his car in a specified position. We mention these matters because the contract between the parties was made when the respondent's car was admitted to the station and it seems to us that a very real issue of fact arose as to whether the appellant took reasonable steps to bring the condition to the notice of the respondent. Apparently no notices were displayed at that time indicating the imposition of such a condition and a jury might well have taken the view that to hand a ticket to the driver of a moving vehicle in a stream of traffic was not a reasonably satisfactory course to adopt in order to give notice of such a condition (cf. the dictum of Mellish L.J. in Parker v. South Eastern Railway Co. [2] which was approved in Henson v. London & North Eastern Railway Co. [3] ). The instant case was not a case in which, as the learned District Court Judge observed, it was possible to say "that no reasonable jury could come to any other conclusion than that either the plaintiff did know, or ought to have known, and that in any event the Council took all reasonable steps to bring the condition before the plaintiff, and that the clause was sufficiently brought to the notice of the plaintiff".

1. (1877) 2 C.P.D. 416, at p. 422. 2. [1946] 1 All E.R. 653, at p. 660.

The Full Court took a somewhat different view upon this point. They observed that: "Apart from the terms of the document (i.e. the ticket), there was no evidence whatever suggesting there was any contract except the mere fact of delivery of the vehicle. Nothing was said by the plaintiff or by the parking station attendants. However, the major factor seems to us to be the existence of the document, which was tendered by the appellant himself. The only purpose which could have been served by the tender was to establish the terms of the contract and the plaintiff sought to rely upon the document, or at least part of it, in support of the case which he made out. We have come to the conclusion that the memorandum endorsed upon the ticket comprises the terms of the contract of bailment between the parties and there is no room for any supposed view that some parts of it would operate but others would not" [1] . We agree with the members of the Full Court that what was created between the parties was a contract of bailment and it is unnecessary to add to the reasons which led to this conclusion. But with respect, the observations which we have quoted seem to us to ignore the critical question whether the appellant had taken reasonable steps to give the respondent notice of the condition in question. Since upon this issue the onus lay upon the appellant a verdict should not have been directed in its favour.

1. (1964) 82 W.N. (Pt 1) (N.S.W.), at pp. 142, 143.

However this is by the way for we do not think that the evidence adduced by the appellant at the trial showed that the loss was of a description which fell within the exempting clause and special leave to appeal was granted, in effect, upon the condition that if this Court should so hold, the appellant would consent to judgment for the plaintiff in the District Court for the sum of £1,300. The ticket upon which the clause appeared was described by the Full Court in the following passage: "The parking ticket received by the plaintiff on 15th December 1961 was tendered and marked Exhibit "A". This comprises an oblong card which at its top bears a space for the time and date of the entry of the vehicle and of its departure to be inserted by the defendant's employees and this is apparently necessary because the parking charges vary in accordance with the number of hours or part thereof that the vehicle remains in the parking station. Immediately beneath these times appear the following words: "This card must be presented to attendant to obtain release of vehicle." Lower down on this side of the card, after some printed matter which is not material hereto, appear three clauses with the heading "Parking Conditions". The second and third clauses relate respectively to the parking charges and the hours when the parking station is open. The first clause reads as follows: - "1. The Council does not accept any responsibility for the loss or damage to any vehicle or for loss of or damage to any article or thing in or upon any vehicle or for any injury to any person however such loss, damage or injury may arise or be caused." Beneath these three clauses and on the same side of the ticket appear these words: " Important. This ticket must be presented for time stamping and payment before taking delivery of the vehicle. Vehicles must be parked as directed by Attendant. Edw. Adams Town Clerk." On the other side of the ticket appear some words which do not appear to be material in this case relating in the main to certain services which are available for motorists at the parking station" [1] .

After some discussion of a number of cases in which the effect of a breach of "a fundamental term" of a contract containing an exemption clause of the type in question here was considered, the Full Court held that the evidence showed that there had been such a breach of the contract of bailment and, that being so, the appellant was not entitled to rely upon the exemption clause. They expressed this view after quoting the following passage from the judgment of Denning L.J. (as he then was) in J. Spurling Ltd. v. Bradshaw [2] "The essence of the contract by a warehouseman is that he will store the goods in the contractual place and deliver them on demand to the bailor or his order. If he stores them in a different place, or if he consumes or destroys them instead of storing them, or if he sells them, or delivers them without excuse to somebody else, he is guilty of a breach which goes to the root of the contract and he cannot rely on the exempting clause. But if he should happen to damage them by some momentary piece of inadvertence, then he is able to rely on the exempting clause: because negligence by itself, without more, is not a breach which goes to the root of the contract any more than non-payment by itself is such a breach" [3] . They noted that his Lordship cited the case of a warehouseman who delivers the bailor's goods without excuse to somebody else and they agreed with this "as a simple illustration of the general rule" and added that "it follows almost as of course that what is said to have happened in this case similarly amounted to a fundamental breach with the result that the defendant cannot rely on the exclusion clause" [4] .

1. [1956] 1 W.L.R. 461. 2. [1956] 1 W.L.R., at p. 465. 3. (1964) 82 W.N. (Pt 1) (N.S.W.), at p. 145.

What was said to have happened in this case was that the respondent's vehicle had been obtained by a person who during the day had entered the parking station and claimed to have lost his parking ticket. He gave his name to an attendant as Paul Robinson, said that he had parked his car in the station and having given what proved to be a fictitious address obtained the issue of a duplicate parking ticket for a vehicle, the registered number of which was said to be CBZ 707. However this was the number of a motor-car the registered owner of which lived some one hundred miles or more from Sydney. Having armed himself with the duplicate ticket - which, on its face, related to car CBZ 707 - "Robinson" entered a vehicle and proceeded to drive it to one of the exits of the parking station where he was permitted to drive it away without any further inquiry. It has been assumed and was assumed during the course of argument that the vehicle which "Robinson" was permitted to drive away was the respondent's vehicle.

We find difficulties in the way of solving the problem in the manner in which it was solved by the Full Court. First of all we have some difficulty, as Devlin J. (as he then was) had in Smeaton Hanscomb & Co. Ltd. v. Sassoon I. Setty, Son & Co. [1] , in understanding precisely what is meant by the expression "fundamental term" and we find further difficulty in the illustration given by Denning L.J. when he denied the application of an exemption clause to a case where a warehouseman misdelivers goods left in his custody without excuse. There is no doubt, of course, that in the case where a contract of bailment contains an exempting clause much as we have to consider the protection afforded by the clause will be lost if the goods the subject of the bailment are stored in a place or in a manner other than that authorized by the contract or if the bailee consumes or destroys them instead of storing them or if he sells them. But we would deny the application of such a clause in those circumstances simply upon the interpretation of the clause itself. Such a clause contemplates that loss or damage may occur by reason of negligence on the part of the warehouseman or his servants in carrying out the obligations created by the contract. But in our view it has no application to negligence in relation to acts done with respect to a bailor's goods which are neither authorized nor permitted by the contract. For instance, if, in the present case, one of the attendants at the parking station had been allowed by the management to use the respondent's car for his own purposes and, in the course of driving it, had caused damage to it by his negligent driving, the clause would afford no protection. Negligence in these circumstances would be right outside the purview of the clause. The same result would follow if an attendant had proceeded, without authority, to make adjustments or repairs to the respondent's vehicle while it was in the parking station and had carried out such work negligently and thereby caused damage. To our minds the clause clearly appears as one which contemplates that, in the performance of the Council's obligations under the contract of bailment, some loss or damage may be caused by reason of its servants' negligence but it does not contemplate or provide an excuse for negligence on the part of the Council's servants in doing something which it is neither authorized nor permitted to do by the terms of the contract.

How then is the question of liability to be resolved in the present case? The appellant has sought to explain the loss of the car by evidence which, upon a trial, would probably be accepted. Of course, if it were not, the loss would remain unexplained and the respondent would be entitled to recover. It is, therefore, necessary to consider the question whether the loss, in the circumstances deposed to, was a loss resulting merely from the failure on the part of the appellant to use reasonable care to keep the car safely whilst it was in its possession as a bailee or whether by some positive act the appellant can be said to have delivered possession of the car to "Robinson". If it did then, in our view, this constituted an unauthorized act performed by the appellant in relation to the respondent's car and he is entitled to recover. But in order to solve this problem some addition should be made to the evidence already mentioned. In order to drive out of the parking station "Robinson" had to pass through a designated exit where an attendant was stationed and it was this official's function to permit vehicles to proceed only upon the surrender by the driver of an appropriate parking ticket. It was such a ticket which, as was said by the superintendent of the parking station, entitled "a person to go into the parking station and drive a car out of the parking station after handing that ticket in to the attendant at the exit". The parking ticket was his "entrance card into and out of the parking station". Possession of any car leaving the station, it seems to us, was, therefore, retained by the appellant until presentation and surrender of such a ticket by the driver of the car. To our minds, therefore, the act of the attendant in permitting "Robinson" to proceed after handing over the duplicate ticket which he had obtained constituted an unauthorized delivery of possession by him to "Robinson" and not a mere act of negligence in relation to some act authorized by the contract of bailment. On this aspect of the case the appellant relied strongly upon the case of Ashby v. Tolhurst [1] but that case has been treated as a case where the defendant's default was mere negligence or inadvertence (see Sze Hai Tong Bank Ltd. v. Rambler Cycle Co. Ltd. [2] and is plainly distinguishable on the facts from the present case.

The fact that the attendant at the exit through which the car was driven was negligent is of no consequence in the case; the act of delivery was one which was neither authorized nor permitted by the contract and in our view the appellant was not entitled to be exonerated by the exempting clause.

This conclusion is, we think, in accordance with the unanimous view of the members of this Court in Tozer Kemsley & Millbourn (A/asia) Pty. Ltd. v. Collier's Interstate Transport Service Ltd. [1] . In that case the facts showed that a bailee had delivered goods of the bailor to a third party who had no authority to receive them and it was held that the bailor was not entitled to be exonerated by a clause which provided that the bailor would not, in respect of the goods bailed, be responsible for any loss or damage arising from a great many specified causes or for "any other loss or damage (whether caused by or arising from any negligence of the proprietors or of their servants or agents or otherwise) which can be covered by insurance by the owner or depositor of the goods". All members of the Court were of the opinion that in the absence of express words or necessary intendment it would be going too far to construe the clause as excusing loss by misdelivery or delivery to an unauthorized person.

For these reasons the appeal should, in our opinion, be dismissed and the appellant should, in accordance with its undertaking, consent to judgment against it in the District Court for £1,300.

The respondent sued the appellant in a District Court on alternative counts for breach of contract and detinue resulting in the total loss to the respondent of a motor vehicle which he owned. The count for breach of contract alleged that the appellant was the proprietor and operator of a parking station business and that the respondent delivered his motor vehicle to the appellant upon a promise by the appellant for valuable consideration to keep the vehicle safely and take care of it at its parking station and to redeliver it to the respondent on request. Breach: that the appellant did not safely keep and take care of the vehicle and failed to redeliver it to the respondent on request.

The action came before a Judge and jury, and the defences were given as denial of contract, denial of breach and denial of detention. The respondent deposed that he had delivered his vehicle to the parking station and received a ticket which showed inter alia the date, the time of entry (8.21 a.m.), three clauses headed "Parking Conditions", and a clause headed "Important", which said: "This ticket must be presented for time stamping and payment before taking delivery of the vehicle". Of the "Parking Conditions" the first clause was in these terms: "The Council does not accept any responsibility for the loss or damage to any vehicle or for loss of or damage to any article or thing in or upon any vehicle or for any injury to any person however such loss, damage or injury may arise or be caused." The second clause fixed the parking charges which, so far as material, were 2s. for the first hour and 6d. for each additional hour or part thereof. The third clause fixed the hours during which the parking station would be open.

The respondent said that he returned after an absence of nearly ten hours, presented the ticket, and paid the amount due to an attendant who stamped the ticket with the time (6.8 p.m.), the amount of the charge (6s. 6d.) and a receipt for that amount. He then looked for his vehicle but it was missing and has never been found. He had used the parking station quite regularly, he said, and knew the system, including the procedure as to the ticket. He knew that there was writing on the ticket but not what it was. If the evidence down to this point - and I have stated it, of course, in summarized form - were accepted, but it were found that the contract did not include the protective clause, the respondent would be prima facie entitled to a verdict. A contention advanced for the appellant that the relationship shown by the evidence was no more than that of licensor and licensee could not be sustained; indeed it was not reasonably open to the jury to conclude that the appellant merely granted the respondent a licence to leave his vehicle on the appellant's land. The only inference that could properly be drawn would be that a contract of bailment was made between the parties under which the appellant was to have possession of the vehicle until the respondent should request its redelivery to him, present the ticket and pay the charges. The jury could not reasonably refuse to find that there was an implied promise by the appellant to the effect that upon the respondent's doing the three things mentioned the right to possession would revert to the respondent and he would be entitled to drive the vehicle away. But the question would remain whether this implied promise was subject to the express term appearing in the first clause of the "Parking Conditions" on the ticket; and that was a question for the jury: Richardson, Spence & Co. v. Rowntree [1] . They would have to be directed in accordance with the law as laid down in Parker v. South Eastern Railway Co. [2] ; but in my opinion they might well have concluded that the appellant had taken steps which in all the circumstances were reasonably sufficient to give the respondent notice of the condition, and if so the protective clause was a term of the contract.

The appellant adduced evidence that one of the attendants employed by it in the parking station had been approached by a stranger who gave the name Paul Robinson, an address in Woollahra, and a number as being the registration number of a car which he said he had left in the parking station, and that the stranger had induced him to issue a "duplicate" ticket for a car of that number. There was evidence from which it might be concluded that the name, the address and the number were fictitious, and that the stranger obtained the "duplicate" ticket by fraud. According to the appellant's own regulations for the guidance of its employees, the stranger, in order to get the respondent's vehicle out of the parking station, would have had to drive it to the exit and present the proper ticket for checking; and it was open to the jury to infer that in fact he presented the "duplicate" ticket which he had fraudulently obtained, and got past the attendant without the latter's having observed that the number on the ticket was not the registration number of the vehicle he was driving away. If the jury had found the facts in this wise they must have concluded that the loss of the vehicle was due to a negligent failure by the attendant at the exit to perform the duty he owed to the appellant.

The case, however, was not left to the jury. The learned Judge held that no reasonable jury could come to any other conclusion than that the respondent either knew or ought to have known that the first clause of the "Parking Conditions" was on the ticket, that in any event the appellant had taken all reasonable steps to bring that condition before the respondent, and that it was sufficiently brought to his notice (scil. to be a term of the contract). Taking the view, erroneously as is now conceded, that this could be regarded as established without any finding by the jury, his Honour held, in effect, that the protective clause covered the case, and he directed a verdict for the appellant.

An appeal to the Supreme Court succeeded. The learned Judges of that Court were of opinion that if a jury took the view of the facts which their Honours thought was the necessary result of the evidence the contract would be found to have included the protective clause, and they construed the clause as extending to the loss of the vehicle by negligence on the part of the appellant; but they went on to hold that, if the facts were found as might be expected, the loss of the vehicle was due to a breach of the contract by the appellant consisting in permitting an unauthorized stranger to take the vehicle from its custody, the attendant having permitted him "to leave with nothing but an authority to take possession of some other vehicle", and that that was a breach of a term so fundamental as to be outside the protection of the clause. The Court, recognizing that it was not empowered to find the facts for itself and enter a verdict for the respondent, ordered a new trial.

An appeal to this Court is brought by special leave, granted upon terms which mean that we have only to decide whether the protective clause, assuming that it was a term of the contract, would have entitled the appellant to a verdict in the action if the evidence given at the first trial, so far as it favoured the appellant, had been accepted by the jury. If the answer is Yes, there must be a new trial so that the facts may be found. If No, the appellant has undertaken to consent to judgment in the District Court for the respondent of £1,300.

The protective clause applies in terms to the loss of or damage to the vehicle however caused. If it be taken literally it saves the appellant from responsibility on any ground at all for loss of or damage to the vehicle. But it cannot possibly be taken literally, for no one would suppose that the parties as reasonable persons could have meant thereby to give the appellant carte blanche to destroy or damage the vehicle deliberately. The problem is to determine the extent of the protection it gives, bearing in mind two things. One is that stipulations of this character, being framed as a rule by the party to be protected and in any case being inserted in his favour, are to be construed strictly. The other is that on established principles of interpretation an unexpressed qualification is not to be implied unless the implication is necessary, in the sense that it introduces only what is "so obvious that it goes without saying": see per MacKinnon L.J. in Shirlaw v. Southern Foundries (1926) Ltd. [1] .

The first of these considerations makes it proper in some cases of bailment to conclude that liability for loss caused by negligence of the bailee or his servants is not intended to be covered by a protective clause. This is so where in the absence of such a clause a judgment holding the bailee liable for loss of the bailed chattel might have been put upon other grounds as well as a failure in the duty of care and skill: Davis v. Pearce Parking Station Pty. Ltd. [2] . But where the only liability would have been for negligence, it is necessarily against that liability that the clause is intended to give protection. The rule has long been settled which Scott L.J. explained in Beaumont-Thomas v. Blue Star Line Ltd. [1] : "In order to construe any exception of liability for events happening in the performance of the contract, where the words of the exception are not so clear as to leave no doubt as to their meaning, it is essential first to ascertain what the contractual duty would be if there were no exception. In the contract of a common carrier by land, or of a shipowner for the carriage of goods by sea, broadly speaking, the carrier is an insurer of the safe delivery of the goods. If they are damaged on the way, he is liable. That is his primary duty. There is also a secondary duty, however - namely, the duty to use skill and care. That duty comes into play in case of the carrier invoking some term of an exception clause as a protection against liability. In such a case, if the excepted peril has been occasioned by the negligence of the carrier's servants, the failure to perform the secondary duty debars him from reliance upon his exception. In the case of a carrier of passengers, no such double liability attaches. He is under a duty to use due skill and care, and no more. The absolute duty of the goods carrier to keep and deliver safely does not apply. This fundamental difference in the basic contract caused the common law courts of England during the last 100 years to make a difference in the interpretation of general words of exception from liability according as the contract to be construed was one imposing the double duty or only the one duty" [2] . Goddard L.J. in the same case stated the rule succinctly thus: " first of all, find what is the nature of the liability which, but for the exception, would rest on the person for whose protection the clause exists. If such liability arises only where there is a lack of due care and skill, it follows that a clause exempting that person from liability exempts him from the consequences of his negligence" [3] .

1. (1954) 91 C.L.R. 642, at pp. 650-652. 2. [1939] 3 All E.R. 127. 3. [1939] 3 All E.R., at pp. 130, 131. 4. [1939] 3 All E.R., at p. 136.

The present case is of the latter kind. In the absence of a protective clause the appellant would have been under a duty to exercise that degree of care for the preservation of the vehicle from loss or injury as might reasonably be expected of a skilled manager of the parking station:Brabant & Co. v. King [4] , but would not have been under any higher duty. Accordingly the clause must give protection against any liability depending ultimately upon a failure to perform that duty.

The rule requiring a strict interpretation of the clause suffices for the conclusion that the word "loss" does not extend to a deliberate giving away of the vehicle to a person not authorized by the respondent to take it. But there is no suggestion that anything of that kind occurred. There was in the strictest sense a loss of the vehicle, and unquestionably it was a loss by the negligence of one of the respondent's servants in omitting to do properly what he was employed to do. But his omission involved a failure to prevent the stranger from taking the vehicle, and this, it is contended, involved more than a loss by negligence, and more than was covered by the protective clause. This contention treats the case as depending upon a decision as to how much more than negligence is within the purview of the clause; and reference has accordingly been made to the doctrine of deviation, which though special to contracts of affreightment has had an influence in other fields; to the principle of Glynn v. Margetson & Co. [1] , that a stipulation inconsistent with the main object and intent of the contract will yield thereto; to the principle which Scrutton L.J. formulated in Gibaud v. Great Eastern Railway Co. [2] , that if you undertake to keep a thing in a certain place, with certain conditions protecting you, and you have broken the contract by not keeping the thing in that place, you cannot rely on the condition; and to the doctrine of the fundamental term or fundamental breach, which has received much judicial support since Lord Devlin began to formulate it in Chandris v. Isbrandtsen-Moller Co. Inc. [3] ; Alexander v. Railway Executive [4] and Smeaton Hanscomb & Co. Ltd. v. Sassoon I. Setty, Son & Co. [5] .

1. [1893] A.C. 351, at pp. 355, 357. 2. [1921] 2 K.B. 426, at p. 435. 3. [1951] 1 K.B. 240. 4. [1951] 2 K.B. 882. 5. [1953] 1 W.L.R. 1468.

A valuable discussion of these principles or doctrines is to be found in Dr. Brian Coote's recently published book Exception Clauses (1964). It may well be important in some circumstances to decide as a matter of juristic analysis whether the operation of a protective clause is, as Dr. Coote would maintain, to qualify the bailees's obligations under the contract so that there is no breach where the clause applies, or is merely to provide a shield against liability in damages for breach of obligations which stand unqualified by the clause. But in the present case what is important, I think, is to recognize that the evident purpose of the clause is to free the appellant from all the responsibility (for loss and damage) to which otherwise its assumption of the position of bailee would have subjected it. The clause is part and parcel of the bargain by which the bailment was created and the reciprocal rights and obligations of the parties as bailor and bailee were regulated. The concern of the clause, as read in the setting in which it came to be agreed upon (assuming that it was agreed upon), was with the legal responsibility which the appellant's acceptance of the bailment should entail. Consequently, to construe it as precluding liabilities to which performance or non-performance of a bailee's ordinary obligation of care would be irrelevant would be to extend it beyond anything the parties could have had in mind. Had they been asked at the time of the contract whether the clause related to any liability unconnected with the legal incidents of the bailorbailee relationship I should think they would certainly have replied: "Of course not": cf. Sze Hai Tong Bank Ltd. v. Rambler Cycle Co. Ltd. [1] . The clause, therefore, precludes liability for loss or damage caused by a breach of the duty of care which ordinarily falls upon a bailee in like circumstances, but affords no defence, in my opinion, to claims upon which, if the clause had been omitted from the contract, there could not have been an issue raised as to whether due care and skill had been exercised. It is for this reason, I think, that the clause would have no application to a claim in respect of damage resulting from an unauthorized interference with the vehicle by a person for whose acts the appellant is responsible.

If this be so, the first inquiry ought to be: upon what cause or causes of action would the appellant have been liable by reason of the events which occurred (assuming the evidence to be accepted) had there been no protective clause; and the protection of the clause should be held to extend to any such liability which depends ultimately upon a finding that the care and skill were not exercised which, in the absence of special provision, would be owed by a bailee in such circumstances.

The first of the causes of action that were set up at the trial, namely breach of a contractual promise to keep the vehicle safely and redeliver it to the respondent, may be put aside as clearly not maintainable on the evidence, for it treats the appellant as an insurer, whereas even without a protective clause the bailment would not have placed it in that position: Cailiff v. Danvers [2] The second cause of action that was alleged, namely detinue, was not maintainable either, on the view I have expressed, because assuming the whole of the evidence to be accepted the appellant's inability to redeliver possession of the vehicle upon proper demand being made was due to impossibility arising without any default for which the appellant was responsible, negligence being, by force of the protective clause, not such a default.

As the District Court is not a court of pleading it is necessary to consider whether any other cause of action appeared from the evidence. I can see none save that of negligence as a bailee, for which clearly enough the appellant is not liable. No doubt the appellant would have been liable for conversion if its servant, the attendant at the exit, had been aware that the person driving the vehicle out was not the holder of a proper ticket and, being in a position to prevent his taking the vehicle, had let him take it. Then the appellant by its servant would have "permitted" the unauthorized taking, in the only relevant sense of the word "permitted", namely the sense of an active facilitation, and the protective clause would not have applied. But so far as appears, no servant of the appellant realized or suspected that the driver was an impostor, or that the vehicle was being taken away otherwise than in accordance with the contract. The only permission that was given, therefore, was, if the evidence be accepted, a permission for a taking away of the vehicle by the person entitled to take it. The permission was given in the belief that the driver of the vehicle was that person. While the taking of a vehicle may be said in one sense to have been permitted, and the taking was in fact unauthorized, the permission that was given is not accurately described as a permission of an unauthorized taking. The Court pointed this out in Davis v. Pearce Parking Station Pty. Ltd. [1] . A claim for conversion therefore could not have succeeded on the evidence.

I should make particular reference to a passage in the judgment of Lord Denning in J. Spurling Ltd. v. Bradshaw [2] upon which reliance was placed in the judgment under appeal. His Lordship was dealing with the case of a bailment to a warehouseman. He said [3] : "The essence of the contract by a warehouseman is that he will store the goods in the contractual place and deliver them on demand to the bailor or his order. If he stores them in a different place, or if he consumes or destroys them instead of storing them, or if he sells them, or delivers them without excuse to somebody else, he is guilty of a breach which goes to the root of the contract and he cannot rely on the exempting clause. But if he should happen to damage them by some momentary piece of inadvertence, then he is able to rely on the exempting clause: because negligence by itself, without more, is not a breach which goes to the root of the contract (see Swan Hunter and Wigham Richardson Ltd. v. France Fenwick Tyne and Wear Co. Ltd., The Albion [4] )".

1. [1956] 1 W.L.R. 461, at p. 465. 2. [1956] 1 W.L.R., at p. 465. 3. [1953] 1 W.L.R. 1026, at pp. 1030, 1032.

The learned Judges below took as virtually covering the case before them Lord Denning's instance of a warehouseman who delivers the bailor's goods, without excuse, to someone else. It is important to observe that his Lordship was drawing a distinction between a delivery to someone else without excuse and an act of negligence not going to the root of the contract. He gave on the next page an illustration of a negligent act which he thought might go to the root of the contract, namely the case of a warehouseman handling the goods so roughly as to warrant the inference that he was reckless and indifferent to their safety [1] . The contrast thus drawn between a delivery of bailed goods to the wrong person without excuse and a case of mere negligence shows that what was meant by the former was a delivery made to the wrong person with knowledge that he was the wrong person, or at least made with a deliberate disregard of the obligation to deliver to the right person. In other words, a conversion of the goods. His Lordship spoke of the wilfully wrong delivery as going to the root of the contract, and it was that description of it that he regarded as excluding the application of the exempting clause: see also Smackman v. General Steam Navigation Co. [2] and Hollins v. J. Davy Ltd. [3] ; but I do not think that such a description connotes more than would be expressed by saying that a conversion of the bailed goods by the bailor is necessarily outside the contemplation of a clause in the bailment contract dealing with the liability of the bailor as such.

1. [1956] 1 W.L.R., at p. 466. 2. (1908) 98 L.T. 396. 3. [1963] 1 Q.B. 844.

I wish only to add that when it is said that the contract in the present case, by its references to the necessity of presenting the ticket to obtain release of the vehicle, puts a higher duty on the appellant than it would otherwise owe the answer seems to me to have been given already by the unanimous observations of this Court in Davis v. Pearce Parking Station Pty. Ltd. [4] .

It follows that I would dismiss the appeal in order that the facts may be found upon a new trial of the action, and I would therefore not require the appellant to submit to judgment in the District Court.

The facts of this case, the course of proceedings in the District Court and in the Full Court of the Supreme Court of New South Wales, and the terms upon which special leave has been given by this Court to appeal from the judgment of the Full Court in favour of the respondent have already been set out, and I will do no more than state shortly why I consider that the Full Court's order for a new trial of the action should stand.

The respondent's case at the trial was for breach of the contract of bailment or in detinue. Neither claim could succeed if the appellant's inability to deliver the car to the respondent upon his request were due to a loss of the car which was unavoidable by reasonable care. Negligence was therefore of the essence of the case. This is the same position as was found to exist in John F. Goulding Pty. Ltd. v. Victorian Railways Commissioners [1] where goods were negligently misdelivered to persons not entitled to receive them. The Court there said: "The conditions of the bailment upon which the defendants received the goods into their possession imposed upon them a duty after the arrival of the goods to deliver them up in compliance with a request made by or under the authority of the plaintiff. This duty was not absolute but qualified; it would not be broken if the defendants were disabled from delivery through destruction or loss of the goods which reasonable care and skill on their part could not avoid" [2] .

1. (1932) 48 C.L.R. 157. 2. (1932) 48 C.L.R., at p. 166.

Apart from the protective clause printed upon the parking ticket, the case made at the trial here would have warranted a verdict in favour of the respondent, for there was evidence that the car had been lost through the appellant's negligence. The appellant is therefore entitled to a new trial only if, upon the evidence given at the trial, it could have been found that the protective clause was part of the contract of bailment and that, upon its proper construction, that clause would protect the appellant against liability for non-delivery due to negligence.

The decision of the Full Court was that, upon the evidence at the trial, it plainly appeared that the protective clause was part of the contract of bailment but that, in the circumstances disclosed by the evidence, it could not have been found that the clause, upon its proper construction, protected the appellant from liability because the clause did not cover the fundamental breach of the contract of bailment constituted by the appellant's misdelivery of the respondent's car.

Whether or not the evidence compelled the conclusion that the protective clause was part of the contract of bailment, it certainly warranted that conclusion, so that our decision in this appeal turns upon the question of law whether the protective clause would cover the negligence of the appellant. I agree with Kitto J. that an affirmative answer should be given to this question and I do so for the reasons which his Honour has given. I merely add that it seems to me that the decision of this Court in Davis v. Pearce Parking Station Pty. Ltd. [1] to the effect that an exemption clause should be construed as excluding liability for negligence, is closer in point than its decision in Tozer Kemsley & Millbourn (A /asia) Pty. Ltd. v. Collier's Interstate Transport Service Ltd. [2] . In the latter case the defendant, except for the exemption clause there relied upon, was liable for misdelivery or delivery to an unauthorized person independently of any negligence and it was held that the exemption clause there under consideration ought not to be considered as excusing loss by misdelivery or delivery to an unauthorized person. In this case, the appellant's liability depends upon negligence and the authority of the case last cited does not require me to construe the exemption clause here under consideration as not applying to free the appellant from liability arising by reason of its non-delivery due to the loss of the car through negligence.

1. (1954) 91 C.L.R. 642. 2. (1956) 94 C.L.R. 384. Windeyer J.

This case arises out of the bailment for reward of a motor-car for safe custody. The facts show that the appellant took the respondent's car into its parking station as a bailee. The transaction cannot be regarded as the mere grant of a licence to the respondent to leave his car there.

The ordinary obligations of a bailee who undertakes the custody of goods for reward are well settled. They may be regarded as either promises implied by law in a contract or as duties imposed by law. But this is not a case in which the rights of the parties depend upon obligations implied or imposed by law: for on this appeal we are to assume, for the purpose of deciding the question posed for decision, that the parties did not leave the matter to the simple dictates of the law but made a special contract. The terms of the writing upon the card handed to the respondent when he put his car in the parking station are to be taken as having become binding in contract between the parties. The terms of this writing qualify the obligations that would be created by the mere fact of bailment. The case must therefore, it seems to me, be considered as simply one of a contract in which the rights and obligations of the parties depend upon the combined effect, or reconciliation, of the terms of the writing and the terms that apart from the writing the law would imply. The doctrine of fundamental terms and fundamental breaches as it has recently been expounded, which the Supreme Court to a large extent adopted, has many difficulties. It does not I think provide the solution of the question in this case. Its uncertain limits and some of the difficulties of applying it can be seen in the close analysis by Doctor Coote in his recent work Exception Clauses, chap. 8 et passim, and in the references there given, especially the article by Mr. Guest in the Law Quarterly Review, (1961) vol. 77, p. 98. Whatever may be the position in other cases, it seems to me that here we have simply to interpret the contract made between the parties.

I go therefore to the words on the card and I read them with two things particularly in mind. One is that the common-law obligation of a bailee is to keep secure the thing bailed; and, the proper charges having been paid, to deliver it to the bailor on demand. The other is that these obligations are not absolute: all that is required of the bailee is that he exercise due care to perform them. In short, apart from whatever is written on the card, the appellant would be liable for damage to or loss of the car if, but only if, that damage or loss was caused by the fault (deliberate or negligent) of its servants. Now what does the card say? It must be read as a whole so far as it records the terms of the bailment. It seems to me that it says two things. The first puts a higher duty on the appellant in respect of delivery or misdelivery than the law would otherwise impose. The second gives an immunity from liability that in other respects might arise from negligence or misconduct by the appellant's servants in relation to the custody of the car. The contract between the parties thus makes the obligation of the appellant more strict in respect of one matter, while relieving it of liability in respect of others.

As to the first, the card states "This card must be presented to Attendant to obtain release of vehicle". Later it states under a heading "Important" - "This ticket must be presented for time stamping and payment before taking delivery of the vehicle". These statements seem to me to mean that a term on which the vehicle was accepted was that it would not be released by the appellant from its custody except on the presentation of the card. If the appellant let it go without the card being presented it would, I consider, have broken its contract although I now realize that a different view was taken of a similar clause in the rather different circumstances of Davis v. Pearce Parking Station Pty. Ltd. [1] . Of course, arrangements had to be made for the issue of a duplicate to a bailor who lost his card. But that only means that, by waiver or novation, a party to the contract could alter or modify it. It does not mean that some stranger could, by pretending that he was the party to the contract, affect the rights of the respondent under it.

The appellant, however, relies upon the words appearing in the first of three paragraphs under the heading "Parking Conditions". These are as follows:

1. The Council does not accept any responsibility for the loss or damage to any vehicle or for loss of or damage to any article or thing in or upon any vehicle or for any injury to any person however such loss, damage or injury may arise or be caused.

Parking Charges: - Between the hours of 7 a.m. and 7 p.m. 2/- for the first hour or part thereof 6d. for each additional hour or part thereof up to a maximum of 7/-. - After Hours Release Fee £1.

3. The Parking Station is open from 7 a.m. to 7 p.m. Mondays to Fridays and 7 a.m. to 1 p.m. Saturdays (Public Holidays excepted).

The wording of paragraph 1 is clumsy. I assume that "the loss or damage to any vehicle" means the loss of or damage to any vehicle and that loss is not restricted to loss to a vehicle by removal of some part or fitting of the vehicle.

The clause is in very wide terms, although its place under the heading "Parking Conditions" and in conjunction with the other conditions there stated may be some indication that it relates, at all events primarily, to loss or damage occurring while the vehicle is in the station. However that may be, it would, I think, cover any loss by explosion or fire occurring on the premises and probably too any loss by theft which did not involve an actual release or delivery of the vehicle to a person not presenting the card. It would also, I do not doubt, cover damage to the vehicle while on the premises caused by the negligence of the appellant's servants, or by the negligence or deliberate intent of some other person for example another user of the service station. But I doubt whether it should be read as extending to harm done deliberately by a servant or agent of the appellant for which the appellant would ordinarily be vicariously liable. However that may be the clause, whatever its exact extent, obviously can have a wide field of operation without curtailing the express provisions of the contract relating to the delivery of the car on the termination of the bailment. The principle that Scrutton L.J. enunciated in Gibaud v. Great Eastern Railway Co. [1] , referred to in the House of Lords in London and North Western Railway Co. v. Neilson [1] , is in point. His Lordship said that " if you undertake to do a thing in a certain way, or to keep a thing in a certain place, with certain conditions protecting it, and have broken the contract by not doing the thing contracted for in the way contracted for, or not keeping the article in the place in which you have contracted to keep it, you cannot rely on the conditions which were only intended to protect you if you carried out the contract in the way in which you had contracted to do it" [2] . In this case the contract was broken because the appellant did not do the thing it had contracted to do in the way in which it had contracted to do it. The respondent's cause of action could I think be appropriately formulated by averments that the appellant had, for reward, promised the respondent to undertake the custody of his vehicle and to release it from its said custody upon presentation of the card and not otherwise, yet without the card being presented released it, whereby it was lost. And, the loss having thus occurred, an action would also lie in detinue: Jones v. Dowle [3] .

1. [1921] 2 K.B. 426. 2. [1922] 2 A.C. 263. 3. [1921] 2 K.B., at p. 435. 4. (1841) 9 M. & W. 19 [152 E.R. 9].

I am therefore of opinion that this appeal should be disposed of in the way that the Chief Justice and Taylor J. propose in their judgment which I have had the advantage of reading. I reach the same conclusion as do their Honours, but by a somewhat different, and perhaps narrower route. That does not mean, however, that I might not in another case be ready to follow their path. Much depends in every case upon the precise meaning of the words that the parties used read in their context and circumstances; for the question, as I see it, is one of interpretation. It is not for a court to say that persons may not contract out of the obligations that the law of bailment imposes, or put new limits on their power to do so. The question for a court is only whether they have done so. The answer to that question, in a case such as this, depends upon the ascertainment of two matters: whether the writing on the ticket in fact formed part of the contract: if so, what is its meaning. The ordinary duties of a bailee to exercise due care both to keep an article securely while in his custody and to return it to the bailor at the conclusion of the custody are not rigidly separable. It may be that the reason why they have so often been separately stated is that the remedy for breach of the former was in assumpsit or case and for the enforcement of the latter detinue lay: see Paterson v. Miller [4] , especially per Cussen J. [5] . But the distinction between the two duties can be important. It was adverted to by Scott L.J. in Ashby v. Tolhurst [1] where he spoke of "the position of a bailee who may protect himself by clauses of exception from his ordinary obligation as a bailee in respect of care in safe custody, and yet still be liable if he misdelivers at the end of the contract of bailment, unless he has covered himself by very carefully chosen words". Far from choosing words that would clearly exonerate it from liability for the consequences of a misdelivery, the appellant here expressly introduced into the contract a term designed to ensure that there would not be a misdelivery, and this term it broke. I would therefore dismiss the appeal.

1. [1923] V.L.R. 36. 2. [1923] V.L.R., at p. 48. 3. [1937] 2 K.B. 242, at p. 258.