Kamidian v Holt & Ors

A person who merely handles goods temporarily, or holds access to premises where goods are stored, does not thereby become a bailee. Bailment requires possession, or an assumption of responsibility for possession, and any intermediate bailment may end when goods are delivered to a reputable carrier if that reflects the parties’ intention.

In specialist fine-art insurance, presenting an object as an authenticated work generally accepted by informed opinion may amount to a representation of fact. A proposer’s private belief is not necessarily the relevant representation. Material doubts about provenance and a materially inconsistent auction description must be disclosed. A contractual exhibition organiser who undertakes appropriate packing and crating is liable for loss caused by inadequate packing.

The claimant alleged that a valuable egg-shaped clock was damaged while lent for a Fabergé exhibition in the United States. He claimed under a valued fine-art insurance policy against the first defendant and in bailment against the second, fourth and fifth defendants.

The court rejected the claimant’s proof of ownership for the purpose of the insurance claim and found that the clock was not by Fabergé. It considered whether the insurance presentation involved misrepresentation or non-disclosure, whether the individual curators were bailees, and whether the exhibition organiser was contractually responsible for inadequate packing and transport.

1. Insurance claim. The claimant failed to establish title to the clock. The insurance claim therefore failed. In any event, the presentation of the clock as a Fabergé item involved an implied representation that there was general acceptance in the art world that it was authentic. That representation was untrue. The claimant also failed to disclose serious provenance doubts, including Sotheby’s description of the clock as merely retailed by Fabergé and its low estimate and sale price. Those matters were material, and the underwriters were entitled to rescind and avoid the separate insurance contract relating to the claimant’s collection.
2. Bailment by the curators. The second defendant’s temporary handling of the clock and access to the safe deposit did not transfer possession or create bailment. He had not voluntarily assumed responsibility for the clock. Alternatively, any bailment was a springing or substitutional bailment which ended when the clock was delivered to the carrier. The relevant considerations included the agreed method of return, the nature of the services undertaken, the allocation of reward, and whether the principal bailor contracted directly with the substitutional bailee. The fourth defendant had never possessed the clock and had assumed no legal responsibility for its safety.
3. Liability of the organiser. The fifth defendant was a contractual bailee from delivery to the safe deposit until return. It had undertaken to provide appropriate and adequate packing and crating. The unsuitable presentation case and return packing breached that obligation. The claimant recovered the reasonable cost of repair, assessed at £1,000. No recoverable depreciation was established because the damage was minor and capable of effective, substantially invisible repair.
4. The claims against the first, second and fourth defendants were dismissed. Judgment was entered against the fifth defendant for £1,000.