Limitation of Actions Consultation - Law Commission

(8) A Note on Bailment
3.116 A bailment involves the delivery of the bailor’s goods into the possession of the
bailee with a promise (express or implied) given by the bailee that the goods will
be redelivered or dealt with in a certain way. 252
The law of bailment is therefore
concerned with the transfer of possession of a tangible item. This transfer may
involve a contract but this is not necessary in all cases. The guiding characteristic
of all modern bailments is the voluntary assumption of possession and arguably the
modern subject of bailment may be defined in this way. 253
Historically, actions for a
breach of a duty arising under a bailment have been enforced either in contract or
in tort. Thus the limitation periods for contract and tort have been applied. 254
It is
also conceivable that, if the plaintiff claims a restitutionary remedy for a tort, a
different limitation period will apply than in respect of other tort actions. We
discuss this below. 255
3.117 At first sight, therefore, bailment raises no specific issues in relation to limitation
periods. Rather bailment is merely a contextual category in which causes of action
in contract or tort (or perhaps restitution) can be brought. While it is a particularly
interesting context from a limitation perspective, in that more than one cause of
action may be brought, it is in that sense no more significant than many other
areas, for example, professional negligence and product liability.
3.118 On another view, however, bailment cannot be dismissed so lightly. Given the
width of the subject matter, it is arguable that it is fictional to try to fit all actions
brought for breach of duty arising under bailment into either contract, tort or
restitution. Some courts and academic commentators have recognised in recent
times the sui generis nature of bailment so that in some cases, the action is not one
based on contract, tort or restitution but, arguably, “breach of bailment”. 256
3. CONCLUSION
3.119 The limitation regimes for contract and tort are probably those of greatest
importance. We have seen that while the “contract” model is largely settled (six or
twelve years from accrual of the cause of action) there are a number of different
models applicable to tort: (i) six years from accrual of the cause of action (the
basic model); (ii) three years from discoverability with a judicial discretion to
disapply (personal injury); (iii) three years from discoverability with a long-stop of
ten years from the supply of the product (Consumer Protection Act 1987); (iv)
three years from discoverability, or six years from accrual of the cause of action,
with a long-stop of 15 years from the negligent conduct (latent damage); and (v)
252 See Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220, 238 per Windeyer J.
253 See N E Palmer, Bailment (2nd ed 1991), p 37 and K H Enterprise (Cargo Owners) v Pioneer
Container (Owners) (The Pioneer Container) [1994] 2 AC 324, 340 - 342 per Lord Goff.
254 See, eg Chesworth v Farrar [1967] 1 QB 407, where an action was brought by a bailor
against a bailee for wrongful sale. The contractual limitation period was applied. See para
5.17 below.
255 See para 5.17 below.
256 See the cases and discussion in N E Palmer, Bailment (2nd ed 1991), Ch 1 and N E
Palmer, “Ambulatory Bailments” (1983) CLP 91. See also K H Enterprise (Cargo Owners) v
Pioneer Container (Owners) (The Pioneer Container) [1994] 2 AC 324.
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