Davis v Pearce Parking Station Pty Ltd [1954] HCA 44; (1954) 91 CLR 642 (8 September 1954)

HIGH COURT OF AUSTRALIA

DAVIS v. PEARCE PARKING STATION PTY. LTD. [1954] HCA 44; (1954) 91 CLR 642

Contract

High Court of Australia
Dixon C.J.(1), McTiernan(1), Webb(1), Fullagar(1) and Kitto(1) JJ.

CATCHWORDS

Contract - Bailment of motor vehicle for reward - Loss - Negligence by bailee - Special clauses exempting bailee from liability for negligence - Construction - "Car garaged at owner's risk" and bailee "not responsible for loss or damage of any description".

HEARING

Brisbane, 1954, July 28, 29;
Sydney, 1954, September 8. 8:9:1954
APPEAL from the Supreme Court of Queensland.

DECISION

September 8.
THE COURT delivered the following written judgment:-
This is an appeal from a judgment of the Supreme Court of Queensland

2. The defendant, which carries on business under the trade name of "Gough's Auto Parking Station", is the proprietor of a motor garage and parking station at the corner of Charlotte and Albert Streets in the city of Brisbane. On 23rd January 1951 at about 12.30 p.m. the plaintiff drove her Holden sedan motor car to the defendant's garage, and left it there in the defendant's custody. She paid the sum of two shillings and sixpence to a servant of the defendant, and received a printed document (exhibit 1) in two parts with a perforation between the parts. The first part is headed "Delivery Ticket", and contains nothing that is relevant. The second part is headed "Parking Check". It contains on its face (inter alia) the following words: "For garaging, subject to conditions set out on back hereof. This receipt must be exchanged at office for a delivery ticket before the motor vehicle can be obtained". On the back of the document are the words: "Conditions - The motor vehicle mentioned on the other side hereof is garaged at owner's risk, and Gough's Auto Parking Station will not be responsible for loss or damage of any description. This check must be exchanged for a delivery ticket at office to obtain re-delivery of vehicle. No servant or agent has authority to waive or modify any of these conditions". (at p647)

3. It has been common ground throughout that the defendant received possession of the car as a bailee for reward, and that the terms of the contract of bailment included the terms set out on the face and back of the "parking check". Both assumptions are, in our opinion, correct. The words "delivery" and "re-delivery", and the reference to the "garaging" of the car, preclude here the view taken on the facts in Ashby v. Tolhurst (1937) 2 KB 242 that the relation of the parties was merely that of licensor and licensee. (at p647)

4. The plaintiff told a servant of the defendant that she would be calling for the car at about 3 p.m., and an entry to that effect was made on the butt from which exhibit 1 had been taken. At about that hour a servant of the defendant named Dorothy Smith moved the plaintiff's car from the position in the garage in which it had been placed, and parked it very close to, and facing, the footpath in Charlotte Street. The ignition key had, as is usual, been left in the switch. In its new position all that anyone who wished to take the car away had to do was to enter the car, start the engine, and drive over the footpath into Charlotte Street. It should be mentioned that Miss Smith was familiar with the plaintiff's car, and was accustomed to refer to it as "Holden 275", those being the last three figures of its registration number. (at p647)

5. The plaintiff did not in fact return to take the car until about 4.30 p.m. What happened in the meantime and immediately after her arrival may be narrated in the words of the learned trial judge: "About 4 p.m. that same afternoon Miss Smith was returning to the office from parking a car when she noticed a man, whom she describes in her evidence as a presentable, reasonably dressed man, driving a black Holden sedan car over the footpath into Charlotte Street from the position in which she had parked the plaintiff's car an hour before. She was at the time only a few feet from him and on his driving side. As the car moved slowly across the footpath she asked the driver, who was a stranger to her, if he had handed in his parking ticket at the office. He had a slip of paper in his mouth, and he merely nodded in the direction of the office, which was some thirty-five yards away, and continued to drive on. Though Miss Smith believed that the car which was being driven away was the plaintiff's, all she did was to proceed to the office and have a search made to ascertain if the plaintiff's parking ticket had been handed in. A seven minute search revealed that it had not. She said in evidence that her attitude of mind up to that stage was that she believed that the car in question was the plaintiff's and that the plaintiff had sent somebody to the defendant's premises to get it for her, but she was not certain that it was the plaintiff's car and that, as a result of the search, she concluded it was someone else's black Holden sedan car that she had seen driven away. No further inquiry or search was made until the arrival of the plaintiff. The plaintiff arrived back at the defendant's premises about ten minutes after Miss Smith's search for her parking check had been completed. It was then about 4.30 p.m. She produced exhibit 1 which was taken by the defendant's foreman, whose name also was Smith. He made a twenty minute search of the premises without, of course, finding the plaintiff's car. He then informed the plaintiff that her car had been stolen. That was the first intimation the plaintiff had received that her car was not safely in the defendant's custody in its parking station. Smith informed the Criminal Investigation Department of the theft, but it was then about 5 p.m. and the car had been stolen an hour before." The car was subsequently recovered by the police in Adelaide in a badly damaged condition, and the thief was convicted and sentenced to a term of imprisonment. (at p648)

6. His Honour correctly defined the duty which rests at common law on a bailee in the position of the defendant. His duty is to exercise reasonable care in and about the custody of the goods placed in his hands. In particular, he is bound to take reasonable care to safeguard the property against theft. Moreover, if the property is stolen, he is bound, as soon as he becomes aware of that fact, to notify the bailor or the police, so that immediate steps may be taken towards its recovery. If the property is lost, stolen, damaged or destroyed, the burden lies on the bailee of proving that the loss, theft, damage or destruction has not been caused by any failure on his part to exercise reasonable care. In particular, if the property is stolen, and he does not promptly after discovery of the theft notify the bailor or the police of that fact, the burden lies on him of proving that prompt notification to the bailor or to the police would not have led to the recovery of the goods undamaged: see Coldman v. Hill (1919) 1 KB 443 . (at p649)

7. His Honour then found that the defendant's servants had been negligent in two respects. He found that it was negligent to place the car in the position in which it was placed, immediately adjacent to Charlotte Street, without either keeping it under observation or removing the ignition key. He also found that, while Miss Smith could hardly have been expected to attempt to interfere physically with the man who was driving the car away, yet all the circumstances pointed to the conclusion that the car had been stolen, and immediate steps should have been taken to notify the police. As things were, no steps were taken until nearly an hour later, and clearly, in his Honour's view, it could not be maintained that, if immediate steps had been taken, the thief would not have been intercepted before the car was damaged. (at p649)

8. These findings were not challenged, and could not, we think, have been successfully challenged, by the respondent. A prima facie case of liability being thus established, it became necessary for his Honour to consider whether the defendant was exonerated by the exempting clause on the back of the parking check. His Honour held that that clause had the effect of exonerating the defendant from liability. That view is, in our opinion, correct. That provision has been set out above. It is a two-fold provision. It says, in the first place, that the car "is garaged at owner's risk." It says, in the second place, that the defendant "will not be responsible for loss or damage of any description." (at p649)

9. The effect of more or less similar provisions in various classes of contracts of bailment has been considered in a quite remarkable number of cases. It has never been doubted that a bailee may exempt himself by express contract from the consequences of negligence on the part of himself or his servants. But it has been repeatedly said that an exempting clause must be construed strictly, and that clear words are necessary to exclude liability for negligence. In Price & Co. v. Union Lighterage Co. (1903) 1 KB 750 Walton J. said:- "The law of England . . . does not forbid the carrier to exempt himself by contract from liability for the negligence of himself and his servants; but, if the carrier desires so to exempt himself, it requires that he shall do so in express, plain, and unambiguous terms" (1903) 1 KB, at p 752 . The decision of Walton J. in that case was that the bailee had failed to exclude liability for negligence, and his decision was affirmed by the Court of Appeal (1904) 1 KB 412 . (at p649)

10. The difficulties to which the requirement of "strict construction" has given rise are well illustrated by the differences of judicial opinion which arose in Rosin & Turpentine Import Co. Ltd. v. Jacob & Sons Ltd. (1910) 100 LT 366; 101 LT 56; 102 LT 81 a case in which negligence was expressly mentioned in the exemption clause, and in which the final decision (in the House of Lords) was, with one dissentient, in favour of the bailee. Contrast also Moran v. Lipscombe (1929) VLR 10 with Crouch v. Jeeves Pty. Ltd. (1946) 46 SR (NSW) 242; 63 WN 147 . It is hardly possible to reconcile all the cases. There are perhaps reasons for the adoption of a different approach to contracts for the carriage of goods by sea from that adopted where other classes of bailment - including contracts for the carriage of goods by land - are involved. According to Halsbury's Laws of England (2nd ed., vol. XXX, p. 332) an exemption clause in a contract for the carriage of goods by sea, if it is to protect against the consequences of negligence, "must expressly refer to negligence, since it is always strictly construed against the shipowner." And reference is made to Leuw v. Dudgeon (1867) LR 3 CP 17 (n) ; Price v. Union Lighterage Co. (1904) 1 KB 412 and The Pearlmoor (1904) P 286 . But in Travers & Sons Ltd. v. Cooper (1915) 1 KB 73 (a case of a warehouseman) a clause exempting from liability "for any damage however caused which can be covered by insurance" was held by the Court of Appeal (Buckley L.J. dissenting) to exempt from liability for negligence; cf. Pyman S.S. Co. v. Hull & Barnsley Railway Co. (1915) 2 KB 729 ("damage however caused"). Both these decisions were based on the words "however caused", and a distinction was drawn between general references to kind of damage (such as occur in the present case) and general references to cause of damage. A similar view had been taken in Manchester Sheffield & Lincolnshire Railway Co. v. Brown (1883) 8 AC 703 where the contract was for the carriage of goods by rail. In that case Lord Blackburn said that, when a man says he will not be responsible for damage however caused, that ought not to be "cut down and made, contrary to the intention of the parties, not to include the negligence of his servants" (1883) 8 AC, at p 710 : cf. Carr v. Lancashire & Yorkshire Railway Co. [1852] EngR 577; (1852) 7 Ex 707 (155 ER 1133) ; Austin v. Manchester, Sheffield & Lincolnshire Railway Co. [1850] EngR 3; (1850) 10 CB 454 and cases cited by Kennedy L.J. in Travers v. Cooper (1915) 1 KB, at p 94 . (at p650)

11. In some cases a distinction has been drawn between cases, such as that of a common carrier, in which the responsibility of the bailee, apart from special contract, is that of an insurer, and cases, such as that of a warehouseman, in which, apart from special contract, there is no liability in the absence of negligence. It has been said that in the former class of case general words may be apt to exclude the liability of an insurer but not liability for negligence, whereas in the latter class of case similar words may be held to exclude liability for negligence on the ground that on any other view they would be entirely without effect. The distinction is logical, and has high authority to support it, though it is possibly open to criticism on the ground that the bailor at any rate is not likely to have had in mind at all the difference between liability for negligence and liability without fault. If we put cases of the carriage of goods by sea on one side, it is only by virtue of a somewhat artificial analysis that he is taken to be bound by a provision which is, in the typical case, printed on a ticket. On the other hand, if he actually read such a clause as that which came in question in Brown's Case (1883) 8 App Cas 703 he would most probably think it meant that he could have no claim in any event, though, if he were asked, he would probably say that wilful damage was not within the protection of the clause. Such considerations seem to have been what Lord Blackburn had in mind in the passage cited above from Brown's Case (1883) 8 AC, at p 710 . (at p651)

12. The present case is a case in which general words are used, and there is no special reference to any manner in which loss or damage may be caused. On the other hand, the case is clearly one in which the bailee would not, apart from special contract, be liable for loss or damage occurring without negligence. And there is, in our opinion, ample authority to justify construing the exemption clause as excluding liability for negligence. (at p651)

13. In McCawley v. Furness Railway Co. (1872) LR 8 QB 57 a passenger had sustained personal injury in a railway accident. A plea that he had agreed to travel "at his own risk" was held good, and a replication alleging negligence was held bad. (The railway company was, of course, not a common carrier of passengers). A precisely similar case was Gallin v. London & North Western Railway Co. (1875) LR 10 QB 212 . The case of Mitchell v. Lancashire & Yorkshire Railway Co. (1875) LR 10 QB 256 might be thought to tend in the opposite direction, but the contract in that case was of a very special character. So also was the contract in Canada Steamship Lines Ltd. v. The King (1952) AC 192 . In Rutter v. Palmer (1922) 2 KB 87 the defendant bailee relied on the words "Cars driven at customer's sole risk", and it was held by the Court of Appeal that he was protected from liability for negligence. No valid distinction can be drawn between "customer's risk" and "customer's sole risk": cf. Ashby v. Tolhurst (1937) 2 KB 242 . Again there are cases of deposit of goods for custody at a railway station, in which such words as "will not be responsible for loss or damage" or "will not be in any way responsible for loss or damage" have been held sufficient to exclude liability for negligence: see Van Toll v. South-Eastern Railway Co. [1862] EngR 585; (1862) 12 CBNS 75 (142 ER 1071) ; Pepper v. South-Eastern Railway Co. (1868) 17 LT 469 ; Pratt v. South-Eastern Railway Co. (1897) 1 QB 718 and Gibaud v. Great Eastern Railway Co. (1921) 2 KB 426 . In these cases the exemption clause did not purport to exclude liability altogether, but only in respect of goods exceeding a certain amount in value. But this can afford no ground of distinction. The point is made that in these cases (as in the present case) the bailee is making a very small charge for taking the custody of goods which are or may be of great value. He is likely to intend, and the bailor would reasonably expect him to intend, to protect himself against (inter alia) a possibly very heavy liability arising from the negligence of a servant. Either party can insure, and such a clause may reasonably be taken by the bailor to mean that, if he wishes to be protected against loss or damage at all, he must insure. Malicious damage is, of course, outside the contemplation of either party. (at p652)

14. It was suggested during argument, emphasis being laid on the word "garaged", that the condition should be read as a whole, and that, so read, it did not apply when the car had been taken out of the garage by the thief, and the defendant became subject to a duty to take prompt steps towards its recovery. We do not think that this view can be sustained. The duty to take steps for recovery is but one aspect of the bailee's general duty to take reasonable care in and about the garaging of the car, and the risk of loss or damage consequential on theft is a risk attached to the garaging of the car, and an "owner's" risk within the fair meaning of the condition. (at p652)

15. Mr. O'Sullivan argued that the condition did not protect against a breach of a special and essential undertaking by the bailee, and he said that there had been in this case a breach of a special and essential undertaking. He found his special undertaking in an implication from two clauses, which have already been mentioned, and which appear in the "parking check", the one on the front and the other on the back. The former reads:- "This receipt must be exchanged at office for a delivery ticket before the motor vehicle can be obtained." The latter reads:- "This check must be exchanged for a delivery ticket at office to obtain re-delivery of vehicle." The special undertaking by the bailee which these clauses are said to import is pleaded in the statement of claim as an undertaking that "the said motor car could not and would not be obtained or removed from the parking station without presentation of the parking check at the office and the obtaining in exchange therefor of a delivery ticket". In the notice of appeal it is put in less stringent terms as an undertaking that the bailee "would not permit any person to obtain the motor car unless such person presented the parking check at the office and obtained in exchange therefor a delivery ticket." (at p653)

16. It is clear that there may be in a contract of bailment special and essential terms, express or implied, breach of which will not be covered by an exemption clause in general terms: see Lilley v. Doubleday (1881) 7 QBD 510 ; The Cap Palos (1921) P 458 ; London & North Western Railway Co. v. Neilson (1922) 2 AC 263 ; Bontex Knitting Works v. St. John's Garage (1944) 1 All ER 381 and Alexander v. Railway Executive (1951) 2 KB 882 . But it is, in our opinion, impossible to imply in the present case the term pleaded in the statement of claim. The conditions relating to presentation of the parking check are obviously, as O'Hagan J. said, inserted for the protection of the bailee, and to imply the term pleaded would be to impose on the bailee an absolute liability in the event of theft - in other words, a much higher duty pro tanto than would rest upon him if the contract contained no exemption clause. Nor do we think that even the less stringent term set out in the notice of appeal - assuming it to be open on the pleadings - could be properly implied, though it is really unnecessary to decide this, because again we agree with the learned trial judge that no breach of the term alleged was established. No person was "permitted" to take the plaintiff's car. It was stolen without the defendant's consent or knowledge. Miss Smith saw it being taken, but she did not realize until too late that it was being stolen, and her omission to interfere physically cannot be regarded as a giving of permission. (at p653)

17. We are of opinion that the judgment of the learned trial judge was entirely correct, and this appeal must be dismissed. (at p653)

ORDER

Appeal dismissed with costs.