G Bosman (Transport) Ltd v LKW Walter International Transportorganisation AG

A bailee for reward owes a contractual obligation to take proper care of goods, whether the care is provided personally or through servants, agents or subcontractors. The bailee cannot avoid responsibility for negligent performance by delegating the protective function to an independent contractor. A contract for carriage may include receiving and storing goods before delivery; the bailee is not gratuitous merely because storage occurs before transport begins. On an application for summary judgment, judgment may be entered where the bailee’s own evidence establishes negligence and leaves no real prospect of proving that the loss occurred despite reasonable care.

LKW Walter arranged for three consignments to be received at the premises of G Bosman (Transport) Ltd before delivery to Runcorn. One consignment was stolen while held at Bosman’s premises. LKW counterclaimed for the loss under the CMR Convention or, alternatively, at common law.

Mr Justice Langley held that the contractual application of the CMR Convention remained arguable, but entered summary judgment for LKW on the common-law claim. Bosman appealed, arguing that the storage was gratuitous, that the facts required investigation at trial, and that it was not responsible for the security company’s failure to monitor its alarm system. The central issue was whether a bailee for reward could rely on delegation of the protective function to escape liability.

1. The appeal was dismissed. The court proceeded on the basis that the application of the CMR Convention remained disputed. Bosman could not change its case on appeal and assert that the Convention applied after relying below on an arguable case that it did not.
2. The arrangement evidenced by the fax and telephone discussions was a contract for receiving, keeping and carrying the goods for an agreed rate. Bosman was therefore a bailee for reward throughout the relevant period. The suggestion that it was gratuitous during storage but became a bailee for reward only when transport began was untenable.
3. Although the bailee bore the onus of showing that the goods were lost despite proper care, summary judgment was appropriate. Bosman’s own evidence, including its solicitors’ letter, supported the conclusion that the alarm system had been inadequately operated and that the monitoring company had failed to respond to repeated alarms. There was no real prospect of Bosman proving that the loss occurred without negligence.
4. Following and adopting the formulation of Lord Pearson in British Road Services and Another v Crutchley & Co Ltd [1968] All ER 811, the bailee’s contractual promise is to take proper care personally or through servants or agents. The obligation is not avoided by employing subcontractors for that purpose. The same principle applies to contracts of carriage by land and simple bailment, consistently with the personal obligations recognised in carriage by sea, including Riverstone Meat Co v Lancashire Shipping Co [1961] AC 807.
5. The court found no assistance in Coggs v Bernard (1703) 2 Ld Raym 909. Morris v Martin & Sons Ltd [1966] 1 QB 716 concerned a different tort claim against a sub-bailee and did not govern the present contractual issue.

The appeal was dismissed with costs. Costs were summarily assessed at £12,000 plus VAT if applicable, payable within 14 days.

• Court of Appeal (Civil Division): appeal from the order of Mr Justice Langley dismissing Bosman’s challenge to summary judgment on LKW Walter’s counterclaim. Appeal dismissed with costs.