The Premier Group [1999] QCA 232; [2000] 2 Qd R 338 — Case Note


This is a case note I wrote about:

The Premier Group Pty Ltd v Followmont Transport Pty Ltd [1999] QCA 232; [2000] 2 Qd R 338

for Commercial Law in the Autumn semester of 2011.  This is a case on bailment and sub-bailment and the rights which these relationships afford each party, especially with regards to detinue.  I achieved a High Distinction for this case-note.

Fannie S. Cohen, graduate of the University of Minnesota School of Pharmacy

After writing so much about bailment, these “drugs” they bailed begin to look a bit more appealing.

1       Introduction

The Case allowed a cause of action in detinue to be maintained by anyone with a greater possessory right than the defendant.  This case extended the principles of sub-bailment expressed in The Pioneer Container[1] and Morris v CW Martin & Sons Ltd (“Morris”),[2] allowing a cause of action to be maintained by anyone with a greater possessory right than the defendant.  Further, this case identified that as long as the plaintiff was above the respondent in a chain of bailment, the plaintiff has the requisite greater possessory right to maintain the action.

1.1      The parties

The Premier Group Pty Ltd (“Premier”) is lodging an appeal, Followmont Transport Pty Ltd (“Followmont”) responding.

1.2      Procedural history

Premier brought an action in detinue against Followmont and ORS in the Supreme Court of Queensland.[3]  Williams J, in the first instance, found for Premier, but did do based on the assumption that Premier had possession.

On the grounds that this assumption was made falsely[4], an appeal was brought to the Queensland Court of Appeal in June 1999.[5]

1.3      Summary of the facts of the case

There existed a four-tiered chain of bailment.  The owners of the medical goods were Johnson & Johnson Medical Pty Ltd and Multigate Medical Products Pty Ltd (“Johnson and Multigate”).  These owners bailed the goods to Premier, who became the first bailee.  Premier then bailed the goods to Express Distribution Services Pty Ltd (“Express”), who became the sub-bailee.  Express then bailed the goods to Followmont, who became the sub-sub-bailee.[6]  The contracts between each party permitted sub-bailment/sub-contracting.[7]

Express owed Followmont a large sum of money, so Followmont held the goods bailed to them under a lien.[8]  It was found in the trial that Followmont wrongly retained the goods.[9]

Premier seeks the return of the goods from Followmont, and damages since they were withheld.

1.4      The case in first instance

The case in first instance sought to determine whether the lien asserted by Followmont was valid.  It was found that, since the quantum of the lien was not specified, the lien was extinguished.[10]

However, Followmont submitted that, since Johnson and Multigate owned the goods, Premier did not have right to possession, and, thus, could not bring forth proceedings: the goods were not theirs.  Williams J summarily dismissed this submission with reference to The Pioneer Container and The Winkfield. [11]

2       The appeal

Followmont brought an appeal, claiming that Premier did not have a right to sue in detinue for goods owned by Johnson and Multigate.  Pincus JA, Moynihand J and Atkinson J unanimously dismissed Followmont’s appeal.

2.1      Detinue

For a suit in detinue to be successful, the following elements must be satisfied.  Firstly, the goods must have been wrongfully detained.[12]  Secondly, when wrongfully detained, the plaintiff (claiming detinue) must be entitled to the possession of the goods.[13]  Finally, this entitlement to possession must come from a right in property or special property in the good.[14]

That the goods were detained wrongfully was found in the case before Williams J.[15]

The matter on appeal was what Williams J decided so summarily in the trial at first instance: whether Premier, at the time of the wrongful detention, had a sufficient right to possession of the goods to maintain an action in detinue.

2.2      The court held

Pincus JA, Moynihand J and Atkinson J held that the right to sue in detinue is based on a sufficient right to possession: any possessory right higher than the right of the respondent to the claim satisfies it.

Further, it was held that any bailor above the respondent in a chain of bailment would have such a right sufficient to maintain an action in detinue

2.3      Issues before the court

2.3.1      A “chain of bailments” existed, and created an immediate right to possession

There is in this case an inherent problem of privity: the plaintiff and the respondent were not contractually related, thus, the plaintiff may not have standing to bring a cause of action.[16]  However, where a chain of bailment has been created, authorities have allowed the bailor to bring a cause of action against a sub-bailee, regardless of privity.[17] 

Morris introduced the requisite steps to forming a valid sub-bailment.  If a bailee, with consent, sub-bails an object to a third party, who knows of the original bailor, sub-bailment is created.[18]  In such a case, the bailee and the owner have identical rights against the sub-bailee.[19]  Further, The Pioneer Container broadened this, adding that this allowed the bailor to bring an action against the sub-bailee without looking to the contract between the bailee and the sub-bailee.[20]

The appellant pointed out a difference: The Pioneer Container dealt with a situation where the person suing was the first bailor: the owner.[21]  The court held that this did not distinguish the facts from the principle in The Pioneer Container, stating that the principle applied to any situation where there is a bailor to sub-bailee relationship, not just where there is ownership.[22]  This was since the principles of sub-bailment could still be applied.  Premier bailed the goods to Express and onto Followmont, with permission of the owner.  Followmont knew of Premier as a superior bailee.  Thus, there was between them a bailor, sub-bailee relationship, giving Premier rights as a bailor against Followmont.[23]

Further, the court said that any superior bailor in a chain of bailment enjoys this relationship, so long as the requisite knowledge and permission requirements are satisfied.[24]

Whilst the court attempted to answer the application by the plaintiff in expanding the rule expressed in The Pioneer Container, this is new law.  The authorities of a chain of bailment[25] have required that the person suing on authority of bailment be the bailor-owner.  Whilst this may have been mere coincidence in that owner’s brought these two cases in court, the use of “owner” in both cases seems to limit their application.

I propose that the decision here, to extend the rights afforded in chain of bailment cases, was correct, but could have been done in a more thorough method to delineate the rule more clearly.

A bailment does not require that the person creating it is an owner, merely, that they deliver the goods to another party with the right to retrieve the goods.[26]  A bailor, even without being an owner, may require the redelivery of the good.[27]  Any bailor may require the repossession of the goods, and obligation to redeliver or compensate is not based on ownership.[28]  Thus, ownership is separated from a right to redelivery of goods in cases of bailment.  This allows a chain of sub-bailment to be created within the factual matrix of this case, pursuant to the requirements in The Pioneer Container, and allowing Premier to require redelivery of goods: Premier now has an immediate right to possession.  Further, the termination of bailment between Express and Followmont does not inhibit this right, since one is not required to look to the terms of the contract between bailee and sub-bailee, when the bailor is enforcing his/her rights against the sub-bailee.[29]

Finally, I propose that this extension of the principles of sub-bailment – allowing for anyone with a greater claim of right by bailment than the person in possession to assume the position of bailor against the ultimate bailee – was in line with other property rights.  The example of a finder’s rights is here most analogous, and was cited in the judgment.[30]  A finder has better right to possession against anyone with lesser title.[31] Now, in bailment, a superior right is sufficient to claim against a final bailee, bringing bailment up to date with property rights in this matter.

2.3.2      That an action in detinue is may be maintained by anyone with a superior right in bailment

The appellant argued that someone could only bring a suit in detinue forth if that person had a right in property or special property in the good.[32]  The respondent argued that any bailor exercising reversion has this requisite right in special property.[33]  The court considered this, and stated that anyone with an immediate right to possession may bring a suit in detinue.[34]

The court quoted multiple authorities for this proposition: it is not new law.[35]  For example, in Healey v Healey[36] Shearman J wrote at 940, “the only title which it is necessary for a plaintiff to allege in order to maintain an action in detinue is a title to the immediate possession of the goods.” The other cited cases similarly support this argument.[37]

The court then broadened the scope of these authorities by stating that this may be satisfied by the right to special property enjoyed by the reversionary interest of a principle bailee.  This, alongside the relative nature of possessory rights, allowed the court to conclude that anyone higher on the chain of bailments has a better reversionary right to the good.

Since ownership is not required in a suit of detinue, only a greater possessory right, Justices Pincus, Moynihan and Atkinson surmised that the principle in The Pioneer Container allows any greater bailor in a chain of bailment to sue in detinue, and that The Pioneer Container cannot be distinguished on the basis of ownership.

3       Scope, reception and policy consequences of the case

This case redefines and broadens the rules and rights of bailors in a chain of bailment.  This creates an Australian authority for the rule as expressed in The Pioneer Container, extended as discussed in §2.3 above.  Further, given the applicability to international trade, specifically with regard to freight and sub-contracting, it would seem that this case takes on a special significance.

However, after the case was decided, The Pioneer Container continued to be cited as authority for the rules of sub-bailment and sub-bailment on terms.[38] Australian cases have cited the case as authority, since in Australia, the case would be binding on Queensland Courts,[39] and persuasive in other jurisdictions.[40]

In Cal No. 14[41], this case was used as authority where The Pioneer Container or Morris would usually be cited: regarding the duties of a sub-bailee.[42] In Palace Backpackers,[43] the case was cited as an authority for the creation of detinue where the appellant refuses to return goods when demanded.[44]  Thus, whereas the scope of the case as Australian authority for complex chains of sub-bailment involving shipping has not yet been explored in case law, it is starting to be cited as the authority for simple sub-bailment, replacing The Pioneer Container as Authority where this case is binding.

Enthusiasm for this case has been more apparent in legal literature.  Soon after the case was published, it was being cited as an Australian clarification of The Pioneer Container, and as a means for circumventing privity in dealings involving bailment.[45]  An article in The Laws of Australia discussed the case in a footnote: it was written that this case is authority for a bailee to sub-bailee relationship, and for overcoming privity, where The Pioneer Container or Morris would usually be authority. [46]  Finally, Understanding Commercial Law[47] surmised the case’s ratio as expanding the applicability of The Winkfield: as long as the bailee’s possession has not been extinguished, they may claim against “a third party who has unlawfully taken possession [of the good].”[48]

It is interesting to discuss the economic ramifications of the caseThe case allows an intermediary to sue for possession of the final good.  This can be seen as incentivizing sub-contracting, since it allows the owner, or original bailor, to require that the companies that they hire deal with legal issues relating to the goods bailed.  This increases the business’ confidence in sub-contracting, since the law, and, thus, costs are more predictable.[49]  This may increase the likelihood of a multinational or other large organization engaging in small businesses, especially Australia specific businesses, especially in freight, increasing domestic growth and providing job opportunities.

It is probable that whatever the court found in this case would have explained away a gap in the law, where there is sub-bailment and the bailor is not an owner.  That the rule is so clearly defined (that anyone with a superior right in a chain of bailment has an immediate right to possession, sufficient to sustain an action in detinue) allows the rule to cover more situations, such as more complex 5 or 6 party bailment chains.  Whereas the wording in The Pioneer Container may have limited its application in such a situation, the generality of the rule in the case would allow it to be applied.  Thus, the decision clarifies the law, is valid, and will probably have positive business ramifications.

Since this is a Queensland Court of Appeal case, the decision is only binding within Queensland.  It has, however, been referenced federally, and in legal literature.  It is probable that if a similar case was to appear before the High Court, the decision will reflect the legal reasoning in the case, and, considering its generally positive policy ramifications, it is likely that the case will be considered authoritative and affirmed.

4       Bibliography

4.1      Articles, Books, Reports

Jagdeep et al, ‘Growth, External Debt, and Sovereign Risk in a Small Open Economy’ (June 1990) IMF Staff Papers 388

Kletzer, Kenneth M., ‘Asymmetries of Information and LDC Borrowing with Sovereign Risk’ (1984) 94(374) The Economic Journal 287

Lewins, Kate, ‘Sub-Bailment on terms and the Australian consumer’ [2002] 9(3) MurUEJL 37

Masel, Geoff and Andrew Ham, ‘A sub-bailment arises where a person who is not the owner of goods, but who retains a present right to possession of them as bailee of the owner, transfers possession of the goods to a third party.’ (2007) TLA [8.5.1970]

Matsumura, Marco S. and Jose Valentim Machado Vicente, ‘The role of macroeconomic variables in sovereign risk’ (2010) 11(3) Emerging Markets Review 229

‘Notes from the Editor – Bailment and carriers’,  (1999) 20 QL 27

Pentony et al, Understanding Commercial Law (Lexis-Nexis, 7 ed, 2010)

4.2      Cases

Armory v Delamirie (1722) 74 CLR 204 (‘Chimney Sweeper’s Case‘)

Bolwell Fibreglass Pty Ltd v Foley [1984] VR 97

CAL No 14 Pty Ltd v Motor Accidents Insurance Board; CAL No 14 Pty Ltd v Scott (2009) 239 CLR 390

Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847

Gullan v Nugent (1988) 166 CLR 18

Healey v Healey [1915] 1 KB 938

Heilbrunn v Lightwood PLC (2007) 243 ALR 343

Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220

Homburg Houtimport BV v Agrosin Private Ltd [2003] All ER (D) 192

Jarvis v Williams [1955] 1 All E.R. 108

Minichiello v Devonshire Hotel (1967) Ltd (No. 2) (1977) 79 DLR (3d) 656

Mitchell v Ealing London Borough [1979] 1 QB

Morris v CW Martin & Sons Ltd [1965] 2 All E.R. 725

Palace Backpackers Australia Pty Ltd v Christensen Industries Pty Ltd [2002] QDC 084

Penfolds Wines Pty Ltd v Elliot (1946) 74 CLR 204

The Pioneer Container; sub nom The KH Enterprise [1994] 2 A.C. 324

The Premier Group Pty Ltd v Followmont Transport Pty Ltd [2000] 2 Qd R 338

The Premier Group PTY LTD v Followmont Transport PTY LTD and ORS [1998] BC 9801373

Rosenthal v Alderton and Sons Ltd [1946] KB 374

The Winkfield [1902] P. 42

4.3      Submissions to court

Followmont, “Outline of Submissions of Followmont”, Submission in The Premier Group Pty Ltd v Followmont Transport Pty Ltd, App. 4539/1998, 22 June 1999

Premier, “Outline of Submissions of Premier”, Submission in The Premier Group Pty Ltd v Followmont Transport Pty Ltd, App. 4539/1998, 22 June 1999


[1]sub nom The KH Enterprise [1994] 2 A.C. 324.

[2] [1965] 2 All E.R. 725.

[3] The Premier Group PTY LTD v Followmont Transport PTY LTD and ORS [1998] BC 9801373.

[4] Followmont, “Outline of Submissions of Followmont”, Submission in The Premier Group Pty Ltd v Followmont Transport Pty Ltd, App. 4539/1998, 22 June 1999, [1], [2].

[5] The Premier Group Pty Ltd v Followmont Transport Pty Ltd [2000] 2 Qd R 338.

[6] Ibid.,  [1].

[7] Ibid., [1]; The Premier Group PTY LTD v Followmont Transport PTY LTD and ORS [1998] BC 9801373  2.

[8] The Premier Group PTY LTD v Followmont Transport PTY LTD and ORS [1998] BC 9801373  3.

[9] The Premier Group Pty Ltd v Followmont Transport Pty Ltd [2000] 2 Qd R 338, [1]; The Premier Group PTY LTD v Followmont Transport PTY LTD and ORS [1998] BC 9801373 12.

[10] The Premier Group PTY LTD v Followmont Transport PTY LTD and ORS [1998] BC 9801373  11, 12.

[11] [1902] P. 42.

[12] Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220.

[13] Gullan v Nugent (1988) 166 CLR 18, 25.

[14] Rosenthal v Alderton and Sons Ltd [1946] KB 374, 377 – 378; Followmont, “Outline of Submissions of Followmont”, Submission in The Premier Group Pty Ltd v Followmont Transport Pty Ltd, App. 4539/1998, 22 June 1999, [1], [2].

[15] The Premier Group Pty Ltd v Followmont Transport Pty Ltd [2000] 2 Qd R 338, [1].

[16] Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847.

[17] Morris v CW Martin & Sons Ltd [1965] 2 All E.R. 725; The Pioneer Container; sub nom The KH Enterprise [1994] 2 A.C. 324; The Winkfield [1902] P. 42.

[18] Morris v CW Martin & Sons Ltd [1965] 2 All E.R. 725, 733.

[19] Ibid.,  732, 733.

[20] The Pioneer Container; sub nom The KH Enterprise [1994] 2 A.C. 324.

[21] Followmont, “Outline of Submissions of Followmont”, Submission in The Premier Group Pty Ltd v Followmont Transport Pty Ltd, App. 4539/1998, 22 June 1999, [5], [6].

[22] The Premier Group Pty Ltd v Followmont Transport Pty Ltd [2000] 2 Qd R 338, [4].

[23] Ibid.,  [5].

[24] Ibid.

[25] Morris v CW Martin & Sons Ltd [1965] 2 All E.R. 725; The Pioneer Container; sub nom The KH Enterprise [1994] 2 A.C. 324.

[26] Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220, 238.

[27] Mitchell v Ealing London Borough [1979] 1 QB.

[28] The Winkfield [1902] P. 42, 55.

[29] The Pioneer Container; sub nom The KH Enterprise [1994] 2 A.C. 324, 333.

[30] The Premier Group Pty Ltd v Followmont Transport Pty Ltd [2000] 2 Qd R 338, [7].

[31] Armory v Delamirie (1722) 74 CLR 204 (‘Chimney Sweeper’s Case‘).

[32] Followmont, “Outline of Submissions of Followmont”, Submission in The Premier Group Pty Ltd v Followmont Transport Pty Ltd, App. 4539/1998, 22 June 1999, [2].

[33] Premier, “Outline of Submissions of Premier”, Submission in The Premier Group Pty Ltd v Followmont Transport Pty Ltd, App. 4539/1998, 22 June 1999, [4].

[34] The Premier Group Pty Ltd v Followmont Transport Pty Ltd [2000] 2 Qd R 338, [7].

[35] Ibid.

[36] [1915] 1 KB 938.

[37] Bolwell Fibreglass Pty Ltd v Foley [1984] VR 97, 99; Minichiello v Devonshire Hotel (1967) Ltd (No. 2) (1977) 79 DLR (3d) 656, 661; Penfolds Wines Pty Ltd v Elliot (1946) 74 CLR 204, 215-217, 221, 226-227; The Premier Group Pty Ltd v Followmont Transport Pty Ltd [2000] 2 Qd R 338, [7].

[38] Heilbrunn v Lightwood PLC (2007) 243 ALR 343; Homburg Houtimport BV v Agrosin Private Ltd [2003] All ER (D) 192.

[39] Palace Backpackers Australia Pty Ltd v Christensen Industries Pty Ltd [2002] QDC 084.

[40] CAL No 14 Pty Ltd v Motor Accidents Insurance Board; CAL No 14 Pty Ltd v Scott (2009) 239 CLR 390.

[41] Ibid.

[42] Ibid.,  [40].

[43] Palace Backpackers Australia Pty Ltd v Christensen Industries Pty Ltd [2002] QDC 084.

[44] Ibid.,  [21].

[45] Kate Lewins, ‘Sub-Bailment on terms and the Australian consumer’ [2002] 9(3) MurUEJL 37, [7]; ‘Notes from the Editor – Bailment and carriers’,  (1999) 20 QL 27, 29.

[46] Geoff Masel and Andrew Ham, ‘A sub-bailment arises where a person who is not the owner of goods, but who retains a present right to possession of them as bailee of the owner, transfers possession of the goods to a third party.’ (2007) TLA [8.5.1970], [3] and footnote 6.

[47] Pentony et al, Understanding Commercial Law (Lexis-Nexis, 7 ed, 2010), 627-630.

[48] Ibid.,  [20.19].

[49] Jagdeep et al, ‘Growth, External Debt, and Sovereign Risk in a Small Open Economy

‘ (June 1990) IMF Staff Papers 388; Kenneth M. Kletzer, ‘Asymmetries of Information and LDC Borrowing with Sovereign Risk’ (1984) 94(374) The Economic Journal 287; Marco S. Matsumura and Jose Valentim Machado Vicente, ‘The role of macroeconomic variables in sovereign risk’ (2010) 11(3) Emerging Markets Review 229.

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