Amony v Okot t/a 323 Royal Inn (Civil Appeal No. 99 of 2018)
High Court
· [2020] UGHC 115
· 2020
Appeal Allowed
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Holding
The High Court held that a bailment relationship existed between the appellant and respondent based on delivery of the motorcycle for safekeeping and issuance of receipts. A bailor need not be the owner of bailed property to have locus standi to sue for breach of bailment. The bailee failed to rebut the presumption of negligence arising from non-return of the motorcycle stolen after staff were poisoned, as the circumstances indicated failure to exercise the standard of care expected of an ordinary prudent person. Appeal allowed; respondent liable for value of motorcycle and general damages for loss of use.
Outcome
Judgment entered for appellant with damages for value of lost motorcycle and loss of use
Facts
On 8 October 2015, Gulu District Local Government assigned appellant a Yamaha motorcycle for use in her duties as Community Development Officer. She signed an indemnity undertaking responsibility for replacement if lost. She entered an arrangement with respondent to park the motorcycle overnight at his business premises for monthly fee of UGX 20,000. On 5 November 2015, she entrusted the motorcycle to respondent for custody until June 2016, paying eight months in advance. On 29 June 2016, respondent's manager informed her the motorcycle had been stolen the previous night after security staff were poisoned with adulterated pork by a guest. Appellant reported the theft to police on 30 June 2016. Chief Magistrate dismissed her suit, finding no formal bailment agreement and that she lacked standing as non-owner.
Issues
- Whether the trial magistrate erred in holding that the appellant had no cause of action against the respondent for loss of a motorcycle that belonged to her employer.
- Whether the trial magistrate erred in finding that there was no written contract of bailment between the parties despite finding that receipts issued were genuine.
- Whether a bailee is liable for loss of bailed property due to theft by poisoning of security staff.
- Whether a bailor who is not the owner of bailed property has locus standi to sue for breach of bailment contract.
Orders
- Appeal allowed.
- Judgment of the Chief Magistrate's Court set aside.
- Judgment entered for the appellant against the respondent for UGX 11,847,235 as the value of the motorcycle at time of loss.
- General damages of UGX 2,400,000 awarded.
- Interest on awards at 8% per annum from date of judgment until payment in full.
- Costs of the suit and of the appeal awarded to the appellant.
Rules and key headnotes
Bailment — Essential Elements — Delivery of Possession
Bailment means the delivery of goods by one person to another for some purpose, upon a contract that the goods shall when the purpose is accomplished be returned or disposed of according to the direction of the person who delivered them. A bailment relationship exists when property is delivered for some special purpose such as storage or safekeeping. It is the element of lawful possession and duty to account for the thing as property of another that creates bailment, regardless of whether such possession is based upon contract in the ordinary sense or not.
Bailment — Formal Requirements — Oral or Written Contract
Although bailment has often been said to arise only through a contract, the modern definition does not require that there be a written agreement. A contract may be oral or written or partly oral and partly written or may be implied from the conduct of the parties. Therefore in the great majority of cases of bailment there is a written contract between bailor and bailee, but a bailment can exist without a written contract. A bailment only requires that the bailor delivers physical control of the chattel to the bailee, who has an intention to possess the chattel and a duty to return it.
Bailment — Bailor's Locus Standi — Possession versus Ownership
As possession is the essence of a bailment, it follows that the bailor need not be the real owner of the property or chattel transferred to the bailee. Possession is a relative concept and it is immaterial for the purposes of creation of a bailment how the bailor came into possession of the chattel. If the bailee has received the chattel from the bailor then he or she must return the chattel to the bailor only. The bailee has no right to not re-deliver the chattel to the bailor on grounds that the bailor is not the real owner. As a person privy to the contract of bailment, the bailor has locus standi to sue for its breach.
Bailment — Standard of Care — Presumption of Negligence
Anyone who takes custody of someone else's property is legally liable for loss or damage to the property due to negligence. The basic rule is that the bailee is expected to return to its owner the bailed chattel when the bailee's time for possession is over, and the bailee is presumed liable if the chattel is not returned. In the absence of any special contract, a bailee is not responsible for loss where the bailee takes such care as a person of ordinary prudence would under similar circumstances take of his or her own chattel of the same bulk, quantity and value. There is an inference or presumption of negligence on the part of the bailee when the chattel entrusted to him has been lost, stolen or destroyed while in his possession. To avoid liability the bailee must rebut that presumption by showing affirmatively that he was not negligent.
Bailment — Vicarious Liability — Theft by Negligence of Servants
The obligation to take reasonable care applies to bailees as well as to their servants in the discharge of their duty. For negligent loss by the servant in the course of employment the master will be responsible. When a principal has in his charge the chattel or belongings of another in such circumstances that he is under a duty to take all reasonable precautions to protect them from theft or depredation, then if he entrusts that duty to a servant or agent, he is answerable for the manner in which that servant or agent carries out his duty. If the servant or agent is careless so that they are stolen by a stranger, the master is liable. An act may be done in the course of employment so as to make his master liable even though it is done contrary to the orders of the master.
Bailment — Exclusion Clauses — Reasonable Notice Requirement
A bailee may attempt to limit liability as respects his or her negligence by inclusion of exclusion clauses. To be valid, a disclaimer must be brought to the attention of the bailor and must be unambiguous. Posted notices and receipts disclaiming or limiting liability must set forth clearly and legibly the legal effects intended. In the absence of anything to indicate that the bailor either expressly or impliedly assented to such printed conditions, prior to or contemporaneously with delivery of the property to the bailee, they will not bind the bailor. The bailee must show that the bailor in fact knew about the disclaimer. Reasonable notice is required as to the existence of the clause and the notice must be sufficiently prominent.
Damages — Measure of Loss — Non-Owner Bailor's Recovery
Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive should be such as may fairly and reasonably be considered either as arising naturally from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach. If a person is in possession of a chattel and his or her possession is interfered with, he or she may maintain a suit but only for the injury sustained by himself or herself. A bailor should be allowed to recover damages beyond the extent of his or her own loss simply because he or she happened to be in possession, but may not recover in such action as if he or she were the owner.
Legislation cited (6)
Cases cited (36)
- Father Nanensio Begumisa and Others v Eric Tiberaga (Supreme Court Civil Appeal No. 17 of 2000)
- Lovinsa Nankya v. Nsibambi [1980] HCB 81
- Zuppa v. Hertz, 268 A.2d 364 (N.J. 1970)
- Russell v. Wilson (1923) 33 CLR 538
- Costello v. Chief Constable of Derbyshire Constabulary [2001] 1 WLR 1437; [2001] 2 Lloyd's Rep 216; [2001] 3 All ER 150
- Gilchrist Watt & Sanderson Pty Ltd v. York Products Pty Ltd [1970] 3 All ER 825
- Morris v. CW Martin & Sons [1966] 1 QB 716; [1965] 3 WLR 276; [1965] 2 Lloyds Rep 63; [1965] 2 All ER 725
- KH Enterprise (cargo owners) v. Pioneer Container (owners) [1994] 2 All ER 250
- R v. McDonald [1881-85] All ER Rep 1063
- Edward v. Newland and Co [1950] 2 KB 534
- Ashby v. Tolhurst [1937] 2 K.B. 242
- Tinsley v. Dudley, [1951] 2 K.B. 19
- Price & Co. v. Union Lighterage Company [1903] 1 K.B. 750
- Thornton v. Shoe Lane Parking [1971] 1 All ER 686
- Chapelton v. Barry Urban District Council [1940] 1 KB 532
- Olley v. Marlborough Court [1949] 1KB 532
- Curtis v. Chemical Cleaning and Dyeing Co Ltd [1951] 1 All ER 631
- McCutheon v. David MacBrayne Ltd [1964] 1 WLR 125
- Armory v. Delamirie [1722] 93 E.R. 664
- Meux v. Great Eastern Ry Co [1895] 2 QB 387
- Claridge v. South Staffordshire Tramway Co [1892] 1 QB 422
- NZ Securities & Finance Ltd v. Wrightcars Ltd [1976] 1 NZLR 77
- Port Swettenham Authority v. T.W. Wu & Co. [1979] A.C. 580
- Sally Wertheim v. Chicoutimi Pulp Company [1911] AC 301
- Hadley v. Baxendale (1854) 156 ER 145
- Christine Bitarabeho v Edward Kakonge (Supreme Court Civil Appeal No. 4 of 2000)
- Martindale v. Duncan [1973] 1 WLR 574
- Lagden v. O'Connor [2004] 1 AC 1067
- Ryce Motors Ltd and another v. Muroki [1995-1998] 2 EA 363
- Masaka Municipal Council v. Semogerere [1998-2000] HCB 23
- African Highland Produce Limited v. Kisorio [2001] 1 EA 1
- Giles v. Thompson [1994] 1 AC 142
- Kibimba Rice Co Ltd v Umar Salim (Supreme Court Civil Appeal No. 7 of 1988)
- Uganda Commercial bank v. Kigozi [2002] 1 EA 305
- Muwonge v. Attorney General [1967] EA 17
- Lloyd v. Grace, Smith & Co. [1912] A.C. 716
Full judgment
The original judgment as reported. Read the original PDF before relying on any passage.
Amony v Okot t_a 323 Royal Inn (Civil Appeal No. 99 of 2018) [2020] UGHC 115 (22 May 2020)
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