England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM OXFORD COUNTY COURT
(His Honour Judge Playford QC)

		Royal Courts of Justice Strand London WC2 Friday 16th November, 2001

1. LORD JUSTICE SEDLEY: This appeal comes before the court by permission granted by Sir Martin Nourse following refusal by the trial judge. Sir Martin in granting permission wrote:

"The judge having found that no criticism could be made of either party for taking `Mr Saunders' at his face value, it is arguable, essentially for the reasons advanced in paragraph 9 of the skeleton argument, that the judge was wrong in law to hold that the defendant had not discharged the onus on it to show that it took reasonable care of the equipment. (It is not arguable that the judge's decision was perverse, and it is inappropriate to suggest that it was.) Although an appeal may well fail, it cannot be said that it has no real prospect of success."

2. The trial judge, however, did enlarge the defendants' time for giving notice of appeal from 14 to 28 days.
3. I just want to say a word about that before I turn to the merits of the appeal. There was, after judgment, an exchange in a form that is not uncommon between counsel and the judge: counsel reflecting that 14 days is only half what it was until recently and the judge (being somewhat older than counsel) reflecting that he, for his part, could remember when it was six weeks. The judge then enlarged time, really on no better ground than that 14 days puts an intending appellant or an appellant's advisers under a good deal of pressure. So it does. It is intended to do so and, for my part, I do not think that the judge ought without considerably stronger grounds to have enlarged the time set by the Civil Procedure Rules. However, nothing material now hangs upon this.
4. The judge's decision, at the end of the day, was that the claimant was entitled to judgment for damages to be determined for breach of bailment. The facts were not in dispute and were found by the judge on the basis purely of the witness statements and the contemporaneous documents, of which there were few.
5. Essentially the facts were these. The claimant company hires out audio-visual equipment. The defendant company runs a conference centre near Wokingham. A fraudster calling himself Saunders hired four plasma screens and ancillary equipment to a total value of something over £22,500 from the claimants to be delivered to the defendants' premises for use at, so he said, an international conference. The claimants had to provide the equipment by hiring it from specialist suppliers.
6. The defendants, for their part, accepted that when the equipment was delivered to them for the intended conference, they became the gratuitous bailee of it. It followed as a matter of law (and this too was accepted) that the defendants became obliged to take reasonable care of the equipment until the claimants collected it later the same afternoon as arranged.
7. What happened was that Saunders - whom neither party had ever seen, but who had all the appearance of respectability - cancelled the conference at the last moment and told the defendants by telephone that TNT would be coming to collect the equipment. When deliverymen arrived the defendants telephoned the fraudster, Saunders, for confirmation that the equipment could go, but they did not telephone or otherwise communicate with the claimants. The equipment went and, inevitably, was never seen again.
8. The owners of the plasma screens looked to the claimants for indemnity and the claimants looked to the defendants for recovery by way of damages for breach of bailment. Hence these proceedings.
9. His Honour Judge Playford QC, sitting at the Oxford County Court on 20th April 2001, made two key findings. He found, first, that both sides had been innocently taken in by a plausible rogue in accepting the arrangements for hire of equipment and use of the conference facilities. He found, secondly, that the defendants had then parted with the equipment negligently, and so had become liable to the claimants for their loss.
10. The first finding reflected the very real difficulty that people in both the claimants' and the defendants' position face: wanting, on the one hand, to be sure that they are dealing with people who are all that they claim to be and are trustworthy; but, on the other hand, facing the risk that checking on people's credentials will give such offence that the very business which is hoped for is lost. Like the judge, I would not level a word of criticism at either party over the fact that they were taken in. It is one of those things that fraudsters unfortunately rely upon.
11. The ground of the second finding was equally straightforward. It was that the defendants had a duty to the claimants to take reasonable care of the equipment while it was on the defendants' premises. It was intended by both sides that it should stay there until it was collected by the claimants later the same day. The least that the defendants could therefore have done, so the judge found, when the defendants' and claimants' mutual client proposed to have it taken off somewhere else was to ask the claimants if that was all right.
12. That seems to me to be, at the very lowest, a perfectly tenable viewpoint. If so, the contention that it is perverse does not even get off the ground. However, as Sir Martin Nourse contemplated in his grant of permission, perversity may not be the standard which Mr MacCabe - who has presented his argument today with clarity and realism - has to reach.
13. Let us assume, as may well be the case, that the primary facts all having been found without controversy, we are as well placed as the trial judge to decide whether the inference of negligence was the right one. Upon that approach, too, it seems to me that the judge was incontestably right. It is nothing to the point to argue now - as is adumbrated in the skeleton argument of the defendants - that the claimants might have said it was all right if the claimants had been asked. There is no evidence to suggest that they would have said it was all right, and evidence to that effect was, without doubt, necessary if the ordinary causal consequences of neglect were not to follow.
14. The heart of Mr MacCabe's argument, however, has been today that the judge ignored the fact that the defendants were perfectly entitled to accept instructions from a man who to all appearances was the mutual client of the defendants and the claimants. But as Lady Justice Arden pointed out in argument, it cannot be said that Saunders was the or even a bailor of the goods. The party to whom the ordinary bailee's duty of care was owed by the defendants was, in my judgment, the claimants. Saunders was not even ostensibly the bailor and it was not ever pleaded that he was. But assume against my own view that there was a bailment by Saunders to the defendants; it can only have been an ancillary or secondary bailment which did not in any way shut out the contemporaneous bailment of the goods by the claimants. So that, whether or not a duty was owed to Saunders, a duty was still owed to the claimants; and it was that duty which the judge found, it seems to me ineluctably, to have been breached.
15. This being so, I consider that the judgment appealed against was not only tenable but right. I would dismiss the appeal.
16. LADY JUSTICE ARDEN: I agree.
17. The question is whether the appellant's conduct broke the duty of a gratuitous bailee to take reasonable care. As I see it, the position is really quite simple. Mr Saunders was the hirer of the goods. The appellant was the bailee, being the provider of the conference centre to which the respondent's equipment was delivered for use at a conference to be held that day. When a carrier arrived later in the day to collect the equipment, the appellant realised that some steps had to be taken to verify the authority of those purporting to collect the goods. He argues, however, that it was sufficient for him to take instructions only from Mr Saunders, the client as respects the accommodation; and further argues that if the respondent had wished to be consulted direct, it was always possible for them to have arranged with the appellant for that to happen, but did not do so. However, there was an arrangement, as found by the judge, that the equipment would be collected by the respondent at the end of the day. As I see it, that was a conclusion which the judge was entitled to reach on the evidence placed before him.
18. Both the appellant and Mr Saunders owed duties to the respondent with respect to the equipment delivered to the appellant. But in my judgment these were separate duties and they were owed direct to the respondent. There is nothing in the facts which suggests that Mr Saunders could vary, reduce or discharge the duty which the appellant, as bailee of the equipment, separately owed to the respondent.
19. One can take a simple example. Suppose that Smith leaves his book with Jones saying that he will collect it later the same day, but that in the meantime he has given Brown permission to come and use it. Brown comes to Jones and says that Black will take the book away. Jones must realise that Smith expects to be able to collect the book himself later the same day and will not be able to do so if Black takes it away. It seems to me to follow inevitably that in this situation Jones will be in breach of his duty to take reasonable care if he hands over the book to Black without instructions from Jones. In my judgment, this duty exists even if both Brown and Black are perfectly honest. As I see it, in my example Smith is entitled to complain that there has been a breach of the duty of a gratuitous bailee to take reasonable care if Jones lets Black take the book away without the consent of Smith.
20. Accordingly, in my judgment, this appeal should be dismissed.
ORDER: Appeal dismissed with costs, to be the subject of a detailed assessment, to form part of the detailed assessment of the costs incurred below for which provision has already been made by the Circuit Judge; direction made that no element of the costs of this appeal recovered by the respondents is to be inflated by the failure of the respondents (in breach of the Practice Direction) to have available at court today a draft bill capable of summary assessment. (Order not part of approved judgment) ____________________