Sub-bailments
Edwards v Newland & Co
Newland contracts to store
Edwards’ furniture in 1939. Newland
sub-contracts the storage to
Burchett. Burchett’s warehouse is
bombed. Some of the furniture is
stolen. Is Newland liable? Could N subcontract?
You trust the person you
contract with to do it right. If
you’ve been given this
responsibility you can’t get
someone else to do it and avoid
this personal liability.
Is this going to be strict liability if
there is no express or implied
term in the contract? Yes.
Newlands should have taken
active steps to preserve the
furniture when he heard of the
damage.
Newland had broken the
terms of the agreement by not
taking RC.
Power Farming NZ Ltd v.
McCaw Contracting Ltd
M is sending its tractor to P to
sell its tractor. K wants to lease
it. M is happy with this idea. P
hands possession to K. Tractor
is destroyed by fire and
uninsured. There is a bailment
relationship between M and P.
What happened when the
tractor went to K? Lease or an
unauthorised bailment?
M had not authorised the lease
– it had just asked P to get the
paper work in order. Get the K
ready and we’ll negotiate other
aspects e.g. length of lease etc.
Key inquiry in sub-bailments:
Was it something that was going
to inevitably go wrong or was it
not something that was
inevitably going to go wrong?
There was a sufficient causal
nexus between breach and
the fire. P is strictly liable –
even if they had taken RC, even
if they had done checks – they
were not allowed to enter into
the agreement so was
breaching bailment arguments.
Morris v CW Martin & Sons
Mink stole to furrier for cleaning.
Furrier sends stole to dry-
cleaner. Stole stolen. Can owner
sue dry-cleaner in bailment?
By taking the possession of
another person’s good the
dry-cleaner has become
responsible to the owner. So
you can directly use the sub-
bailee
Gilchrist v York Products
Clocks to shipowners for
carriage. Shipowners unload
clocks onto wharf. Clocks
stolen. Can owner sue wharf in
bailment?
No direct relationship or contract
– the sub-bailee took on the
obligation. Don’t need direct
contractual link or bailment link.
Pioneer Container
O pay H to ship good. They
have K relationship with you. H
needs to give it to ship owner
under sub-bailment. Sub-
contracting is allowed. K
between H and S, and O and H.
Ship sinks.
O wants to sue the S in HK. S
wants to go to Court in Taiwan
(time-barred).
S says you had a K with H (K1),
this allowed H to sub-contract.
Our K(K2) with H, says you
must sue under Taiwanese Law
– by the Os entering K1
allowing a sub-contract – it
must take on the agreements
of K2.
Bailment on term: bailee can
bind the bailor to the terms of a
sub-bailment under certain
circumstances
Because consented to sub-
bailment on any terms – they
are bound by these. They could
have authorised the bailee on
restricted terms and because
they have done this they can be
bound on them.
