Followmont Transport Pty Ltd v The Premier Group Pty Ltd

[1999] QCA 232

IN THE COURT OF APPEAL	99.232
SUPREME COURT OF QUEENSLAND

Appeal No. 4539 of 1998

Brisbane

[Followmont Transport P/L v Premier Group P/L]

BETWEEN:

FOLLOWMONT TRANSPORT PTY LTD
(ACN 010 518 279)

(First Defendant) Appellant

AND:

THE PREMIER GROUP PTY LTD

(ACN 052 455 982)

(Plaintiff) Respondent

EXPRESS DISTRIBUTION SERVICES PTY LTD

(ACN 077 851 506)

(Second Defendant)

FREIGHT AWAY PTY LTD

(ACN 060 365 504)

(Third Defendant)

Pincus JA
Moynihan J

Atkinson J

Judgment delivered 22 June 1999

Judgment of the Court.

APPEAL DISMISSED WITH COSTS

CATCHWORDS:	BAILMENTS - sub-bailment - whether bailee has a right to possession over sub-bailee - whether bailee can recover goods from its sub-bailee - whether contractual relationship necessary to maintain action in detinue - in what circumstances a chain of bailments arises.
TROVER AND DETINUE - DEMAND AND REFUSAL - POSSESSION OR RIGHT TO POSSESSION - RIGHT TO POSSESSION - whether action in detinue by bailee can be maintained against its sub-bailee - whether baileee has right to possession over sub-bailee - whether right to sue in detinue depends on ownership or superior possessory right.
Alicia Hoisery v Brown Shipley [1970] 1 QB 195 Flack v NCA (1997) 150 ALR 153; (1998) 156 ALR 501 Gilchrist Watt and Sanderson Pty Ltd v York Products [1970] 1 WLR 1262 Morris v CW Martin & Sons Ltd [1966] 1 QB 716 Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 Spectra International PLP v Hayesoak Ltd [1997] 1 Lloyd’s Law Reports 153 The Pioneer Container [1994] 2 AC 324 The Winkfield [1902] P 42 Westpac Banking Corp v Royal Tongan Airlines (1996) Aust Torts Reports ¶ 81-403
Counsel:	Ms A Philippides with her Mr D G Clothier for the appellant Mr H B Fraser QC for the respondent
Solicitors:	Murrell Stephenson for the appellant Shand Taylor Lawyers for the respondent
Hearing Date:	22 April 1999

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 4539 of 1998

Brisbane

Before Pincus JA
Moynihan J
Atkinson J

[Followmont Transport P/L v Premier Group P/L]

BETWEEN:

FOLLOWMONT TRANSPORT PTY LTD
(ACN 010 518 279)

(First Defendant) Appellant

AND:

THE PREMIER GROUP PTY LTD

(ACN 052 455 982)

(Plaintiff) Respondent

EXPRESS DISTRIBUTION SERVICES PTY LTD

(ACN 077 851 506)

(Second Defendant)

FREIGHT AWAY PTY LTD

(ACN 060 365 504)

(Third Defendant)

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 22 June 1999

1. Johnson & Johnson Medical Pty Ltd (“Johnson”) and Multigate Medical Products Pty Ltd

   (“Multigate”) retained the respondent The Premier Group Pty Ltd (“Premier”) to provide freight

   services for the delivery of their medical supplies (“the goods”) to hospitals and medical practitioners

   throughout Australia. When the respondent took possession of those goods it became a bailee of the goods. For distribution in Queensland, the respondent ordinarily used the services of Express

   Distribution Services Pty Ltd (“Express”). When the goods were delivered to Express it became

   a sub-bailee of the goods. Express subsequently delivered them to the appellant for ultimate

   delivery to hospitals and medical practitioners north of the Sunshine Coast. The appellant

   Followmont Transport Pty Ltd (“Followmont”) was therefore a sub-sub-bailee of the goods.

   Because Express owed it a considerable amount of money, the appellant wrongfully retained the

   goods to be delivered after demand for their return by the respondent. The respondent sought

   return of those goods in an action in detinue. In doing so, it in effect argued that it determined a

   revocable bailment.

2. A number of matters were traversed in the decision by the learned chamber judge. The only

   matter to be determined on the hearing of the appeal, as succinctly stated by Ms Philippides of

   counsel for the appellant, was whether the respondent Premier had an immediate right to possession

   at the time of the wrongful detention such as to found a right to sue the appellant in detinue. The

   appellant submitted that the immediate right to possession which must be shown must arise from

   some property or some special property in the goods in order to satisfy the prerequisites to sue in

   detinue; whilst it was true that special property existed in the case of a bailee who had an immediate

   right to possession because of some direct bailment of the goods, the question here was whether

   Premier, the respondent, the first bailee in the chain, would have a sufficient immediate right to

   possession arising from special property in the goods where there was an intermediate bailee

   between it and the ultimate sub-bailee of the goods.

3 In Morris v. C.W. Martin & Sons Ltd 1 the English Court of Appeal held that an owner
of goods, even if he or she had no right to immediate possession, was able to maintain an action for

negligence directly against a sub-bailee. The theoretical basis for Lord Denning’s decision in Morris

v CW Martin & Sons Ltd 2 was a passage in Pollock and Wright An Essay on Possession in the

Common Law: 3

“If the bailee of a thing sub-bails it by authority, there may be a difference according as it is intended that the bailee’s bailment is to determine and the third person is to hold as the immediate bailee of the owner, in which case the third person really becomes a first bailee directly from the owner and the case passes back into a simple case of bailment, or that the first bailee is to retain (so to speak) a reversionary interest and there is no direct privity of contract between the third person and the owner, in which case it would seem that both the owner and the first bailee have concurrently the rights of a bailor against the third person according to the nature of the sub-bailment.”

The passage was again referred to with approval by Lord Pearson delivering the judgment of the

Privy Council in Gilchrist Watt and Sanderson Pty Ltd v York Products Pty Ltd. 4

1. In this case where there are four parties and none of the bailments have determined, each

   of the superior bailors have concurrently the rights of a bailor against the fourth person, who in this

   case is the appellant. The respondent became a bailor of the goods as well as remaining a bailee

   to the owners. Its bailee, Express, in turn bailed the goods to the appellant. It was conceded that

   the appellant knew about the respondent’s being a superior bailor to itself. There was therefore a

   chain of bailments. 5 The Pioneer Container 6 puts it beyond doubt that a sub-bailee of goods is

   liable as bailee to the owner of goods even though there is no contractual 7 relationship between

   them, where the sub-bailee knows or is taken to know of the owner. In this case the sub-bailee had

   actual knowledge of the existence of the bailor who was not the owner. As Diplock LJ put it in

   Morris v CW Martin & Sons Ltd, 8 it brings into existence “the relationship of bailor and bailee by

   sub-bailment”. It is because of this that the owner can prove the bailment upon which he relies

   when he proceeds directly against the sub-bailee 9.

2. In this case the owners of the goods are the bailors of the goods to the respondent, Premier,

   the respondent is the bailor of the goods to Express, who is the bailee to Premier and sub-bailee

   to the owner. Express, in bailing the goods to the appellant Followmont, is bailor to Followmont

   who is a bailee to Express, a sub-bailee to the respondent Premier and sub-sub-bailee 10 to the

   owners. The ultimate bailee, the appellant in this case, is in a bailment relationship with each of the

   bailors of the goods, the owners, Premier and Express. 11

3. The question to be determined on this appeal is whether the first bailee can maintain an

   action in detinue 12 against its sub-bailee. As can be seen this sub-bailment itself gives rise to a

   relationship of bailment. 13 The first bailee as bailor to its sub-bailee has demanded return of the

   goods and there has been an unlawful failure to deliver up those goods when demanded. 14 This

   terminated the bailment 15 and gave rise to a right to sue in detinue. 16

4. The right to sue in detinue 17 does not depend on ownership but a higher possessory right

   than the person from whom return of the goods is sought. A right to immediate possession is

   sufficient to justify proceedings in detinue. 18 Such a possessory right might be a right of possession

   arising out of some special property such as the revived reversion of a principal bailee. 19 A

   right to possession is relative and not absolute 20 and depends on a superior possessory right, such

   as that of a finder 21 or even a thief as against a dispossessor who is not the true owner. 22 A bailee,

   such as the respondent, whose bailment has not been determined has custody of the goods which

   gives rise to its right to immediate possession of the goods. 23 The Pioneer Container is not

   distinguishable on the basis that the plaintiff was the owner as the right to sue in detinue does not

   depend on proof of ownership. 24 Accordingly, when seen in this light, The Pioneer Container is

   authority for the proposition that any party having a superior possessory right can maintain an action

   in detinue against a sub-bailee 25 with whom it is not itself in a contractual relationship. 26

5. As Premier had a superior possessory right and had made demand for the return of the

   goods which had been wrongfully refused, it could maintain an action in detinue against its sub-

   bailee, Followmont.

6. The appeal is dismissed with costs.