TUTORIAL PAPER NO.

Question 1

Answer the following questions:

(a) Compare bailment and licence and why is the distinction significant?

(b) What are the duties of a bailee?

(c) In a bailment case which party has the burden of proof?

Question 2

Bill is a panel beater and spray painter. On 17th July Michael, a volleyball coach, left
his late model Commodore HSV (valued at $56,000) with Bill for repair and
repainting. When he left the car, Michael asked if he could store his $300 leather
briefcase in Bill's metal office safe. Bill replied: "No problems mate! The briefcase
goes into the safe, and I guarantee that all your stuff will be as secure as the Crown
Jewels." Bill later locked the briefcase inside his office desk drawer as the metal
safe was full. Without Bill’s knowledge, Michael also left a valuable coin collection
(worth more than $5,000) in the glove box.

Tom, a mechanic from an adjoining workshop was going away for a week from the
16th July and Bill also agreed to allow him to leave some of his electronic equipment
in Bill's workshop for safekeeping.

On the night of 19th July there was a fire in Bill's workshop which caused extensive
damage to the contents including Tom's machinery, and Michael's car and briefcase.
It was also discovered on the morning of the 20th that Michael's coins had been
stolen. The thief could have broken through a skylight before the fire broke out, or
could have stolen the coins during the later confusion when the Fire Department was
on site. It could not be proved one way or the other.

The fire started in some oil-soaked rags. It may have been caused by Bill leaving an
electric heater on all night, but it is equally possible that the thief intentionally started
the fire in the oily rags to cover his (or her) tracks. There was indisputable evidence
that Bill securely locked the workshop door and his desk drawers at the close of
business on 19th July. Also there were security bars on the skylight and an alarm
system in the shop, but these may have been prised apart or by-passed by the thief
(the fire damage precluded a factual determination one way or the other). The car
doors and glove box had not been locked by Bill (the boot could be opened by a
button inside the glove box). The metal office safe in Bill's office was not broken into
nor was the safe of its contents damaged by the fire.

Advise Bill of his legal position in relation to Michael and Tom.