Pitt Son & Badgery Ltd v Proulefco (1984) 153 CLR 644
Bailment; generic terms implied by common law; duty of a bailee to take reasonable care of goods entrusted to them.
Facts: The owner of eighty-six bales of wool left them with Pitt Son & Badgery (PS&B), a wool broking company, to be sold by auction. Proulefco SA purchased the wool at the auction but, under the conditions of the sale, had to pay in full before taking delivery. Payment was made on 5 December, but the wool was destroyed by fire in the early morning of 6 December, while still stored in PS&B's shed The shed was in a complex enclosed by a paling fence but a number of palings were missing. The premises were unlit at night and were unattended by any watchman or other means of safeguarding against unauthorised entry. The fire in question was lit by a drifter who, for some reason, stuffed paper into a hole in the wall of the shed and set fire to the paper. The wool was destroyed in the subsequent fire.
Issue: Had PS&B breached a duty, imposed on a bailee by the common law, to take reasonable care of goods entrusted to them?
Decision: It was the duty of PS&B, as bailee of Proulefco's goods, to take reasonable care to prevent foreseeable damage to the wool, and PS&B had breached that duty.
Reason: Gibbs CJ said (at [6]):
"It can hardly be denied that the appellant's duty required it to take reasonable care to keep out intruders who might misappropriate or damage the wool. Because of the size and weight of the bales the risk of theft was slight, but, when regard is had to the value of the wool, it is impossible to say that no precautions needed to be taken. It may also have been true that the risk of damage by intruders was slight, but it was foreseeable that, under modern conditions, there might be intruders who might, in one way or another, cause damage to the wool. It was the duty of the appellant to take reasonable care to prevent damage of that kind. In deciding what was reasonable, regard must, of course, be had to the difficulty and expense of the possible precautions. The provision of a secure fence is so obvious a precaution and so comparatively inexpensive to provide, that failure to provide it was negligent."