Who is liable if they are damaged?
Following the devastating fires in the ACT and south east NSW, we have received an enquiry from someone helping family and friends. They have asked the following:
“I am storing furniture and items for a friend in my shed and they are paying me $50.00 a week. What happens if my house and shed are destroyed by fire? Who is liable for the costs of their goods? They are not insured by me or by the friend.”
This is a really good question and involves the law of bailment.
What is a bailment?
This is a really common occurrence in everyday life. For example, when a person drops off their car to a mechanic get it serviced, this is a bailment. The owner is the bailor and the mechanic is the bailee. Another example is dry cleaning of clothes. The owner of the clothes is the bailor and the dry cleaner is the bailee.
So in the case of a person storing goods for another, the owner of the goods is the bailor and the person string them is the bailee.
A frequent example is taking possession of another person’s good to store them, as if often the case in family and friend relationships.
What duty does a bailee have?
Who is liable if the goods are damaged?
Usually at law, if you allege that someone else has caused you damage, you must show that they have caused the damage. However, in a bailment, the law reverses the onus of proof. This is a very important distinction.
Would the bailee in the fire zone be liable for damage to goods in a fire?
However, if the goods were stored outside and there was storage space elsewhere (in a shed for example) and the goods were damaged, it is likely that would not be able to show that they were not at fault.
Tips
Here are several tips to those who want to help family of friends with storage:
- When taking goods, expressly tell the bailor that it is their responsibility to obtain insurance. Better yet, put this in any written agreement you have to take possession of the goods.
- Take out insurance and factor this into the cost of any charge to the bailor you require.
- Care for the goods as if they are your own.
- If there is an impending risk of damage to the goods, tell the bailor and offer them the opportunity to collect the goods. There is a proposition at law that says that a person must mitigate (minimise) their losses. The law will not aid someone who has ‘sat on their hands’ and not taken reasonable steps to prevent the damage. In the bushfire example, if the bailee told the bailor of the fire risk and offered for them to collect the goods, if the bailor fails to do so, they may have not mitigated their losses.
For more information or to make an appointment in either our Canberra or Queanbeyan office please do not hesitate to contact Matthew Bridger or Thomas Maling: