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Letter of Advice to Ms. Belle Betray

52 Old Bridge Road

Samsonvale Qld 4520

Date: 15 Feb 2020

Subject: Advice regarding your legal position and remedy for return of Prancing Dancer from Bloomfield

Dear Ms. Belle Betray

This is with respect to your situation of Bloomfield Farm Pty Ltd not returning Prancing Dancer (PD) to you, in response to your email to Bloomfield for return of PD. In light of your agistment agreement between you and Bloomfield Farm Pty. Ltd (Bloomfield) concluded on 13.10. 2019 and the subsequent conduct of Bloomfield indicating breach of such agreement, you are entitled to the following legal rights and remedy.

The agistment agreement between you and Bloomfield created a commercial bailment agreement vesting right of possession of PD to Bloomfield as bailee in return of you as bailor paying agistment fees subject to terms and conditions stipulated in the Agreement, per Coggs v Bernard (1703) 2 Ld Raym 909. However, as Bloomfield has breached the agistment agreement, vide clause 6 establishing the duty of retaining possession by the bailee, by loaning PD to a third party Terror Creek and allowing PD to leave bailee’s property without your written consent, you are entitled to legal right to possession of Prancing Dancer per Union Transport Finance Ltd v British Car Auctions Ltd [1978] 2 All ER 385 (CA). Bloomfield is obliged to return PD to you on an immediate basis upon your formal demand to return PD and is also liable to all losses and injuries incurred to PD while in possession of Bloomfield per Lilley v Doubleday (1881) 7 QBD 510 and Edwards v Newland [1950] 2 KB 534 (CA). You may make a formal demand to Bloomfield to return PD on an immediate basis on account of his breach of the agistment agreement and the bailment relationship and give notice to sue for such breach in the event that Bloomfield does not return PD along with full costs on account of any loss or injury to PD. You may also mention the legal duty of Bloomfield to comply with her demand without unreasonable delay.

Please feel free to revert back in case of any query.

With Warm Regards

Bernard Shyster

Partner

Memo of Advice to Partner

To: Bernard Shonk

From: Graduate Lawyer

Date: 5.3.2020

Re: New client Belle Betray – file ref B234/2020

The issues that arise in the instant case scenario are:

1. Whether there has been a commercial bailment on account of the agistment agreement between Belle and Bloomfield

2. Whether Belle can claim back her stallion Prancing Dancer from Bloomfield in light of breach of bailment

Issue 1

Bailment has been defined with respect to the legal relationship between two parties that revolves around the goods (alternatively, referred to as “tangible personal property”) and on the fragmentation of possession of personal property and ownership between those same partiesi. The case Re S Davies and Co Ltdii, explains bailment with reference to a contract that is either implied or express regarding delivery of personal chattel in trust ensuring that the trust shall be duly executed and upon the elapse or performance of the time or the use for, on the condition that such property was bailed, the chattels are redelivered in either their altered or original form. In Hobbs v. Petersham Transport Co. Pty. Ltd.iii It was held that a bailment occurs when there is transfer of possession by delivery of goods from one person, i.e., the bailor to another person, the bailee, subject to a promise that may be either implied or express, that they will be re-delivered to bailor in a stipulated way.

However, the essential ingredient of a bailment is the voluntary nature of the gained possession, per Brambles Security Services Ltd v Bi-Lo Pty Ltdiv. Thus, the bailee is sufficiently characterized by the ingredient of voluntary and knowing possession. It is not necessary for any specific undertaking by the bailee on behalf of the bailor or delivery to the bailee if there is consent for possession on part of the bailee. Thus, the consent of the owner and the machinery by which possession was acquired by the bailee are not necessary stipulations for a bailmentv. In the case of Coggs v Bernardvi, various categories of bailment were delineated and among them, there is contract for work and labour, alternatively referred to as “commercial bailment”, according to which, there is delivery of chattel for work to be done on them for reward. In other words, the bailment which involved payment of money is referred to as “commercial bailment”.

In the instant case, Belle entered into an agistment agreement with Bloomfield. An agistment agreement refers to an agreement by which a landholder may allow a horse owned by another person to keep their horse on their land for an agistment fee. By virtue of the agistment agreement, Bloomfield as the Agistor agreed to agist the Owner’s (Belle) horse Prancing Dancer upon the Owner paying all Agistor’s agistment fees and other charges. By virtue of clause 5 of the Agistment Agreement, the Owner gave the Agistor a lien over the horse and progeny for payment of the agistment fees along with all other charges and expenses which the Owner must pay under the Agreement, thereby giving right of possession to the Agistor. Further, certain services to be provided by the Agistor are listed under the agreement including with regard to paddocks, provision of water, feeding of the horse, worming of PD and trimming of the hoover of PD for which the costs will be charged to the Owner, provision of lucerine hay in certain conditions and chargeable veterinary treatment in the event of illness or injury of PD.

We observe that all the conditions of commercial bailment, following Brambles Security Services Ltd. V. Bi-Lo Pty Ltd and Coggs are fulfilled. The essential ingredient of bailment viz. possession of the horse of Belle by the bailee or agistor has been fulfilled and the clause stipulating lien over the horse for agistment fee to be paid by Belle and the services rendered by the agistor, establishing reward or mutual advantage, constitutes a contract for work and labour, in terms of a commercial bailment, per Coggs.

Issue 2

In regard to the issue of whether Belle can claim back PD in light of possible breach of bailment, it must be determined as to whether there has been a breach of bailment. As this is a commercial bailment, the obligations of the bailor (Belle) and the bailee (Bloomfield) are accordingly delineated. Firstly, with regard to the obligations of the bailor in a commercial bailment, the bailor must provide the goods which are reasonably fit for the use according to the purpose indicated by the nature of the goods and for which the bailor represents that they are reasonably fit, per Section 55 of the Australian Consumer Law and Gemmell Power Farming Co Ltd v. Niesvii. In the instant case, PD was Belle’s best horse who was a constant winner of shows and a sought after stud horse valued at $45,000. Thus, this obligation of Belle as bailor was fulfilled in the bailment of PD by virtue of the agistment agreement.

Next, we turn to the obligations of Bailee in commercial bailment. Among the duties prescribed in the jurisprudence are the duties to not deviate from the essential terms of the bailment and the duty to retain possession. The duty to not deviate from the essential terms of the bailment is imposed upon the bailee failing which the bailee may have to forfeit his rights due to the departure from such terms per Lilley v Doubledayviii. If a bailee departs from such terms then he may have to suffer three consequencesix. Firstly, the bailor retains her right to immediate possession of the goods, per Union Transport Finance Ltd v British Car Auctions Ltdx. Secondly, any protection rendered by virtue of exclusion or limitation clause contained in the bailment in favor of the bailee is likely to be forfeitedxi. Thirdly, the bailee becomes strictly liable with respect to all ensuing losses or injuries to the bailed property on account of the shifting of the liability in negligence to insurer’s liability, per Lilleyxii. This implies that the bailee entails upon itself strict liability with respect to all injuries or ensuing losses with respect to the bailed property, notwithstanding whether or not there was any failure concerning reasonable care on his or her partxiii.

With regard to the duty to retain possession, it is imperative that notwithstanding any express undertaking, it is integral to the bailment agreement, unless that obligation is expressly excluded, that the custody enjoyed by the bailee with regard to personal possession of goods is retained by the bailee and not delegated to a third party for safekeeping, per Edwards v Newland & Coxiv. The same principle applies to unauthorized sub-bailment to a third partyxv. “Sub-bailment” occurs or happens in the situation when the individual who is not the proprietor of good but who has the current right of possession considered as bailee of the owner, vests possession of such goods to a third party, per China-Pacific SA v Food Corp of India (The Winson)xvi. For sub-bailment to occur, there must be consent by the ownerxvii. Upon breaching this condition, the bailee is responsible for all losses on account of such breach, including the right to possession against the head bailorxviii. Further, the bailee’s responsibility is modified to strict liability, as described above from, duty to take reasonable care of goodsxix.

In the instant case, the agistment agreement vide clause 6 provides that the Agistor agreed that the horse will not leave their property at any time during the agistment without the written permission of the Owner. It was found that Belle, during the course of doing consulting work with regard to her knowledge of large horse breeds and giving advice to Pacific films, was asked to advise on the type and breed of horses. While examining the portfolio of photos with different horses, she saw that PD was included in one of those photos. On inquiry, she found that PD was on loan from Bloomfield to a third party named Terror Creek to be used as a stud horse for a number of Terror Creek mares.

By virtue of the fact that Bloomfield had allowed the horse to be left from his property by loaning it to Terror Creek, Bloomfield breached Clause 6 of the Agistment Agreement. As a result of the breach of the essential term of bailment, Bloomfield forfeited his right as a bailor per Lilley v Doubledayxx. Consequently, on account of the loan, he has exercised an unauthorized sub-bailment. On account of such unauthorized sub-bailment and his deviation from an essential term of the bailment vide breach of Clauses 6 of the Agistment Agreement, Bloomfield is obliged with strict liability with respect to all losses or injuries to PD, per Lilley and Edwards v Newland & Co. This follows that costs associated clauses 2, 4 and all chargeable services under the Agistment Agreement are to borne completely by Bloomfield.

Further, Bloomfield has been making excuses not to return PD upon the request of Belle by email to return PD. In Jackson v. Cochranexxi, it had been held that upon termination of the contract the bailee can justify failure to deliver the goods only in accordance with the contract of bailment. No such provision of the agistment agreement is stipulated to excuse Bloomfield from not delivering the horse upon the termination of the contract. Thus, the termination of the contract by Belle on account of her email request must be adhered to by Bloomfield and Belle is entitled to get her horse PF returned from Bloomfield immediately.

Thus, it is advised that Belle and Bloomfield having entered into a commercial bailment, and Bloomfield having breached the agistment agreement provision and correspondingly, his duties as a bailee to not deviate from the bailment agreement and the duty to retain possession, the Belle is entitled to regain possession of PD immediately, per Union Transport Finance Ltd v British Car Auctions Ltdxxii and Belle may enforce the obligations of strict liability with respect to all losses and injuries to PD on Bloomfield.

With regard to the course of action to be taken by Belle, it is advised that Belle may make an effective and unequivocal demand for the return of Prancing Dancer from Bloomfield in order to enforce the obligation of Bloomfield to return PD to Belle, per Mitchell v. Ealing London

Borough Councilxxiii and Jackson. Belle may also inform Bloomfield of the breach of the agistment agreement and the bailment relationship on account of breach of clause 6 of the agistment agreement by loaning PD to a third party, Terror Creek. She may also inform Bloomfield of the strict liability inured on account of the breach of the bailment agreement and the loan. She may remind Bloomfield of his legal duty to comply with her demand of returning PD without unreasonable delay, per Mitchell. Finally, she may assert her legal right to sue for breach of the agistment agreement and the bailment in case of non-compliance by Bloomfield to return PD.

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