BAILMENT

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Contract of bailment

A contract of bailment is a legal agreement in which one party (the bailor) gives possession of goods to another party (the bailee) for a specific purpose.

The bailor retains ownership of the goods, but the bailee is responsible for their care and safekeeping.

There are three main types of bailments:

Gratuitous bailment: This is a bailment in which the bailee does not receive any payment for their services.

Bailment for reward: This is a bailment in which the bailee receives payment for their services.

Special bailment: This is a bailment that is created by a specific agreement between the bailor and the bailee.

The duties of the bailee in a contract of bailment are to:

Take reasonable care of the goods

Return the goods to the bailor when the bailment is terminated

Pay for any damage to the goods that is caused by their negligence

The bailor's rights in a contract of bailment are to:

Demand the return of the goods at any time

Sue the bailee for any damage to the goods that is caused by their negligence

Bailment - Contract of bailment - Destruction of goods - Liability for - Onus of disproving negligence - Goods in wrongful possession - Liability as insurer

In the case of The 'Kota Sejarah' [1991] 1 MLJ 136, the High Court of Singapore held that a bailee who destroys goods is liable for their loss, even if they were in wrongful possession of the goods. The court held that the bailee had a duty to take reasonable care of the goods, and that they had failed to do so. The court also held that the bailee was liable as an insurer, even though they had not been specifically designated as such in the contract of bailment.



Bailment - Contract of bailment - Duty of bailee - Nature of duty - Loss of goods prima facie evidence of negligence - Onus on bailee to prove that he was not negligent - Contracts Act 1950 (Act 136), ss 104 & 105

In the case of United Engineers (Malaysia) Bhd v Yeong Sinn Hoong (t/a Syarikat Tropical Baggage) [1990] 1 MLJ 381, the High Court of Kuala Lumpur held that the duty of a bailee is to take reasonable care of the goods bailed. The court held that the loss of goods is prima facie evidence of negligence on the part of the bailee, and that the onus is on the bailee to prove that they were not negligent. The court also held that the Contracts Act 1950 (Act 136), ss 104 & 105, apply to bailments, and that the bailee is therefore liable for any loss or damage to the goods caused by their negligence.



Bailment - Contract of bailment - Failure to plead contract of bailment and negligence - Whether res ipsa loquitur applicable

In the case of Ong Ee Lim v Government of the Federated Malay States [1937] MLJ 40, the Court of Appeal of the Federated Malay States held that the failure to plead a contract of bailment and negligence does not prevent the application of the doctrine of res ipsa loquitur. The court held that the doctrine of res ipsa loquitur can be applied in bailment cases, and that it will apply if the facts of the case are such that the loss of the goods is so extraordinary that it can only be attributed to the negligence of the bailee.



Bailment - Contract of bailment - Goods left in flat by former tenant - Whether storage rent payable

In the case of CC Loke v SH Benson (Singapore) Ltd [1967] 1 MLJ 26, the High Court of Singapore held that a former tenant is not liable to pay storage rent for goods that they have left in their flat after they have vacated the premises. The court held that the former tenant is not in possession of the goods, and that they are therefore not liable for storage rent.



Bailment - Contract of bailment - Liability for acts of servants

In the case of Port Swettenham Authority v TW Wu & Co (M) Sdn Bhd [1978] 2 MLJ 137, the Privy Council held that a bailee is liable for the acts of their servants, even if the bailee is not negligent. The court held that the bailee is responsible for the actions of their servants, and that they are therefore liable for any damage that is caused by their servants' negligence.



Bailment - Contract of bailment - Liability for negligence - Onus of proof - Effect of Contract Act

In the case of Gee Hup & Co v Yeo Swee Hern [1935] MLJ 66, the Court of Appeal of Johore held that the onus of proof lies on the bailee to prove that they were not negligent in a bailment case. The court held that this is because the bailee is in a better position to know what happened to the goods, and that they should therefore bear the burden of proof. The court also held that the Contract Act 1872, s 114, does not apply to bailment cases, and that the bailee is therefore not entitled to the benefit of the presumption of innocence.



Bailment - Contract of bailment - Termination of - Completion of repair works

In the case of Nambiar v Chin Kim Fong [1963] MLJ 60, the High Court of Johor Bahru held that a bailment is terminated when the purpose for which the bailment was created is completed. The court held that this is because the bailee no longer has any obligation to the bailor, and that they are therefore free to do with the goods as they please.



Bailment - Contract of bailment - Whether special contract by implication

In the case of Jackson's Malaya Bhd v Penang Port Commission [1973] 2 MLJ 27, the High Court of Penang held that a special contract by implication may be created in a bailment case. The court held that this is because the parties may agree on terms that are not expressly stated in the contract, and that these terms will be binding on the parties. The court also held that the terms of a special contract by implication will be interpreted in accordance with the ordinary rules of contract law

In the case of Gee Hup & Co v Yeo Swee Hern [1935] MLJ 66, the Court of Appeal of Johore held that the onus of proof lies on the bailee to prove that they were not negligent in a bailment case. The court held that this is because the bailee is in a better position to know what happened to the goods, and that they should therefore bear the burden of proof. The court also held that the Contract Act 1872, s 114, does not apply to bailment cases, and that the bailee is therefore not entitled to the benefit of the presumption of innocence.



Bailment - Contract of bailment - Termination of - Completion of repair works

In the case of Nambiar v Chin Kim Fong [1963] MLJ 60, the High Court of Johor Bahru held that a bailment is terminated when the purpose for which the bailment was created is completed. The court held that this is because the bailee no longer has any obligation to the bailor, and that they are therefore free to do with the goods as they please.



Bailment - Contract of bailment - Whether special contract by implication

In the case of Jackson's Malaya Bhd v Penang Port Commission [1973] 2 MLJ 27, the High Court of Penang held that a special contract by implication may be created in a bailment case. The court held that this is because the parties may agree on terms that are not expressly stated in the contract, and that these terms will be binding on the parties. The court also held that the terms of a special contract by implication will be interpreted in accordance with the ordinary rules of contract law