82 The same approach had been taken in The Great Northern Railway Co v Harrison (1852) 12 CB 576; 138 ER 1032. That case concerned a deed by which it was recited that the railway company was "desirous of being supplied with 350,000 sleepers of Dantzic or Memel timber", based on a particular specification. The other party covenanted to supply the company with 350,000 such sleepers and to deliver them by mid-summer 1848 "as and when, and in such quantities, and in such manner as the engineer of the company should, by order or requisition on writing, from time to time, within the period limited by the specification, direct or require". There was no covenant by the company to buy and take 350,000 sleepers but the Exchequer Chamber held that the recital quoted above amounted, in the context, to a covenant. Parke B, delivering the judgment of himself, Wightman J, Erle J, Platt B, Crompton J and Martin B, said (at ER 1045):
"[The deed] begins with a recital that the company 'are desirous of being supplied with 350,000 sleepers'. If the words had been 'have agreed to take 350,000 sleepers', there would have been an end of the argument; but if the deed goes on to shew that such was the intention of the parties, and it is sufficiently made out by the language they have subsequently used that the company have agreed to require that quantity, it will equally constitute a covenant on their part to take them."
83 The guiding principle was stated by Parke B in these terms (also at ER 1045):
"No particular form of words is necessary to form a covenant; but wherever the court can collect from the instrument an engagement on the one side to do or not to do something, it amounts to a covenant, whether it is in the recital or in any other part of the instrument."
84 In the present case, the recital must be taken to evidence a promise by the Owner to "rent" the Equipment to the Renter. There is, as I have said, an entire absence of promises and obligations of the Owner in the operative provisions. This, coupled with fact that the Owner, in its printed form, contemplates the creation of an "Agreement" (thereby indicating that there must be some quid pro quo given by the Owner for the numerous promises on the part of the Renter), drives one to the recital as the only source of anything that the Owner "has agreed" to do. The words "the Owner has agreed to rent to the Renter", while, on their face, referring to a past event, should, in the circumstances, be taken to reflect a promise of the Owner to "rent to the Renter" that is current and operative as at the time the agreement takes effect. In The Great Northern Railway Co v Harrison (above), Parke B was of the view that a recital that the railway company "have agreed to take" would have been "an end of the argument" as to whether they were obliged to take - the clear implication being that the recital of past agreement to take would have continued as a presently operative promise to take. And in Farrall v Hilditch (above), the recited agreement that execution should be stayed was construed as a covenant not to proceed to execution, the words "it has been agreed" being regarded as the equivalent of "it has been and is agreed".
85 The conclusion must therefore be that the agreement is, on the Owner's part, an agreement to "rent" the Equipment to the Renter, with the Renter, in turn, giving a very large number of promises to the Owner to constitute the bipartite bargain; and the Owner occupying, in relation to the Equipment, a position having the incidents or attributes listed at paragraph [76] above.
The effect of the agreement "to rent"
86 There can, I think, be no doubt that the "rent" concept, employed in relation to goods (with "rent" being used as a transitive verb connoting something that someone does to goods), is a concept of giving possession of goods for reward. To "rent" is, in general parlance, the same as to "lease" (viewed from the landlord's perspective); and it seems to me clear that the contract with which I am here concerned is in substance a "lease" of goods according to the analogy which causes that term, which is strictly applicable to land, to be applied also to goods so as to indicate a transaction under which a person in whom resides the right to possess the goods gives possession to another for a period in return for payment by that other: see, for example, the definition of "lease", in relation to goods, in s 3 of the Registration of Interests in Goods Act 1986.
87 Such a contract is properly described as a contract of hire, as explained by Baroness Hale of Richmond in TRM Copy Centres (UK) Ltd v Lanwall Services Ltd [2009] UKHL 35; [2009] 1 WLR 1375 at [23]:
"The essence of hire is that the hirer acquires the use and possession of the goods from the provider in return for a rent, whether payable in cash or in kind."
88 In terms of the classifications of Holt CJ in Coggs v Bernard (1704) 2 Ld Raym 909; 92 ER 107, this is locatio; and it is perhaps noteworthy, in the present context, that Baroness Hale referred to the quid pro quo given by the hirer as "a rent".
89 If one were seeking to draw an analogy with a lease of land, two aspects of significance would be noticed. First, the grant of a lease creates in the lessee a leasehold estate in the land and that interest is itself an item of property. Second, a covenant for quiet enjoyment is implied in favour of the lessee but a covenant for good title (or good right to confer possession) is not: see Budd-Scott v Daniell [1902] 2 KB 351. The covenant for quiet enjoyment would be breached by interference or disturbance of possession by the lessor or someone lawfully claiming through or under the lessor. That covenant, of its nature, would not be breached by someone claiming under a title paramount, that is, a title superior to the lessor's. Interference of that kind would be relevant only to a covenant for good title.
90 Another instructive analogy is with hire-purchase unregulated by hire-purchase legislation. Karflex Ltd v Poole [1933] 2 KB 251 concerned a hire-purchase agreement of the kind exemplified by Helby v Matthews [1895] AC 471 under which a hiring for a term was coupled with an option for the hirer to buy the goods at the end of the term. Goddard J said in that case (at 264-265):
"I do not think that hire-purchase is an ordinary contract of bailment. The bailor who lets out the goods is not an ordinary bailor, nor is the customer, who agrees to pay these instalments with the hope and intention of becoming the full owner, an ordinary bailee, and there are special contracts and special representations in such an agreement, and I cannot doubt that one special representation is that the bailor is the owner of the goods at the time that he delivers them.
As was pointed out in the argument, if that were not the case, the hotel-keeper who furnishes his hotel on the hire-purchase system, as so many hotel-keepers do, might find himself in the position, while his business was going on and he was regularly keeping up the instalments, of having the whole of the furniture swept out of his hotel by somebody coming in with a title. It is said that he would have a cause of action against the person who sold it to him, but it seems to me that no man in his sane senses would entered into such a position as that except upon the condition that the person who is letting the furniture to him is, at the time he lets, the owner of the property."
91 It was thus observed that, in the case of a hire-purchase agreement, there is a so-called "special representation" that the bailor is the owner at the time he delivers the goods to the hirer. In the later case of Mercantile Union Guarantee Corporation Ltd v Wheatley [1938] 1 KB 490, Goddard J said (at 497) that, when a person lets goods on hire-purchase, "it is a condition that at the time he lets them he is the owner of the property in question" (see also Barber v NWS Bank plc [1996] 1 WLR 641). In Australian Guarantee Corporation Ltd v Ross [1983] 2 VR 319, by contrast, the Full Court of the Supreme Court of Victoria held that the condition required only that the bailor have ownership at the time at which transfer of ownership to the bailee is required.
92 A significant consideration in these cases, as the quoted extract from the Karflex case shows, was that a person who lets goods on hire under a hire-purchase agreement "is not an ordinary bailor" and that the person taking goods under such an agreement "with the hope and intention of becoming the full owner" is not "an ordinary bailee". Hire-purchase cases were thus seen as distinguishable from "ordinary" bailment, the difference being that the hirer entering into a hire-purchase agreement sets store by the right ultimately to become the owner, while the "ordinary" bailee seeks only to have possession and enjoyment for the period of hire.
93 The present case concerns "ordinary" bailment. The leasehold and hire-purchase analogies are not directly applicable. The situation of the "ordinary" bailee was considered by Marks J in Australian Guarantee Corporation Ltd v Ross (above). In a judgment concurred in, as to the relevant matter, by Murray J, his Honour focussed on what was "critical to the operation of the agreement". Ownership, as such, was not critical in the case of the ordinary bailment. Marks J said (at 329):
"I consider that a person who expressly hires out a chattel, as did AGC, inter alia, in this case, expressly agrees to confer on the hirer rights which a hirer normally enjoys such as exclusive use and control of the thing hired. The expressions 'hire', 'hirer' in the agreement compel such a meaning be given to the words."
94 Marks J then, at 329-330, quoted a number of sources:
"Palmer on Bailment, 1979, p. 65 says:--
"A bailment gives rise to a form of property because it creates a division of interests in rem within the compass of a single chattel. The division is chronological rather than geographical; as in the case of leaseholds, a bailment divides the ownership of the res 'on a plane of time'. The bailee obtains a legal interest in the form of possession, which is in many respects equivalent to an estate in land..."