Involuntary Bailee

This entry covers the law of England and Wales; sections 12 and 13 of the Torts (Interference with Goods) Act 1977, discussed below, also extend to Northern Ireland, and Scots law is not covered. An involuntary bailee is a person whose possession of a chattel, although known to them and the result of circumstances of which they are aware, comes about through events over which they have no proper control and to which they have given no effective prior consent. That is the definition given in Palmer on Bailment, as quoted by Mr Justice Richard Smith in Crédit Agricole Corporate and Investment Bank v Persons with an Immediate Right to Possess Goods [2025] EWHC 1346 (Ch) at [31]. The judge also records that Palmer suggests that, on the expiry of the agreed term of a bailment, the original bailee may be classed as an involuntary possessor ([32]). The cases cited in this entry are decisions of the courts of England and Wales.

Involuntary bailment differs from gratuitous bailment. In Yearworth v North Bristol NHS Trust [2009] EWCA Civ 37 at [48] the Court of Appeal summarised the law of bailment: a bailment arises when, even on a limited or temporary basis, the bailee acquires exclusive possession of the chattel or a right to it, and it can exist even though no consideration passes from the bailor to the bailee (a gratuitous bailment). The Court explained that the basic justification for imposing duties on a gratuitous bailee has always been that a person is not obliged to take possession of a chattel in relation to which another person has rights and that, if they choose to do so, they assume duties, although that reasoning has been eroded to a limited extent by later principles on involuntary bailment. A gratuitous bailee therefore chooses to take the goods. In the core case an involuntary bailee did not make that choice; the Crédit Agricole judgment also describes a bailee who originally consented to possession but is compelled by circumstances to retain the goods for longer than it wishes ([31]).

The duty owed is to do what is right and reasonable. In Da Rocha-Afodu v Mortgage Express Ltd [2014] EWCA Civ 454 at [42], the Court of Appeal set out what it called the classic statement of the liability of an involuntary bailee: “An involuntary bailee has an obligation to do what was right and reasonable.” The Court rejected the argument that the judge had been wrong on that point of law ([49]) and held that the court must be alert to all the particular circumstances of the case when applying the duty ([50]). It also recorded that there is some support for the view that the line between an involuntary bailee and a gratuitous bailee should not be drawn too sharply ([44]). In that case the mortgage conditions set out steps for dealing with goods left behind; the Court treated them as a framework and a starting point, not the whole test ([52]).

Uncollected goods: a statutory power of sale for bailees who meet the Act’s conditions. In Crédit Agricole at [65] the judge, recording the bank’s concession, said that the bank’s position as involuntary bailee would not give rise to a right as such to sell the items, but would afford potential relief from liability if suit were brought on account of a sale. A power of sale comes from sections 12 and 13 of the Torts (Interference with Goods) Act 1977, with Schedule 1, and applies to a bailee only where the conditions in section 12(1) are met. Section 12(1) applies to goods in the possession or under the control of a bailee where (a) the bailor is in breach of an obligation to take delivery of the goods (or, if the terms of the bailment so provide, to give directions as to their delivery), (b) the bailee could impose such an obligation by giving notice to the bailor but is unable to trace or communicate with the bailor, or (c) the bailee can reasonably expect to be relieved of any duty to safeguard the goods on giving notice to the bailor but is unable to trace or communicate with the bailor. In Crédit Agricole the judge held that the bank was entitled under section 12(3)(b) to sell the contents of the one safety deposit box deposited after the Act’s commencement, because the conditions were met, and that the court could authorise that sale under section 13 ([71] and [72]). Under section 12(3), a bailee who has given notice of intention to sell in accordance with Part II of Schedule 1, or who has failed to trace or communicate with the bailor after taking reasonable steps, and who is reasonably satisfied that the bailor owns the goods, is entitled as against the bailor to sell them. The bailee must account to the bailor for the proceeds of sale less the costs of sale, on the footing that the bailee should have adopted the best method of sale reasonably available (s.12(5)). A sale duly made gives a good title to the purchaser as against the bailor (s.12(6)), but if the bailor did not in fact own the goods it does not give a good title as against the owner (s.12(4)). Section 12 and Schedule 1 have effect subject to the terms of the bailment (s.12(8)). Section 12 does not apply where the goods were bailed before the commencement of the Act (s.12(9)); the Torts (Interference with Goods) Act 1977 (Commencement No. 1) Order 1977 (S.I. 1977/1910) brought sections 12 to 16 and section 17(1) and (2) of, and Schedule 1 to, the Act into force on 1 January 1978 (art. 3) and construed that reference in section 12(9) as meaning the commencement of those enactments (art. 4). Sections 12 and 13 and Schedule 1 extend to England and Wales and Northern Ireland, not Scotland. The notice-to-collect mechanism in Part I of Schedule 1 is framed around goods accepted for repair or other treatment, goods accepted for valuation or appraisal, and goods held as custodian.

The notice and court-sale rules. A notice of intention to sell under section 12(3) must be in writing and sent by post in a registered letter or by recorded delivery; it must give the bailee’s name and address, sufficient particulars of the goods and where they are held, the date on or after which the bailee proposes to sell, and any amount payable by the bailor that fell due before the notice. The period before sale must give the bailor a reasonable opportunity to take delivery, and must be not less than three months if an amount payable by the bailor fell due before the notice was given (Schedule 1, Part II, para 6). A bailee may not give the notice, or sell under it, at a time when the bailee has notice that, because of a dispute concerning the goods, the bailor is questioning or refusing to pay all or part of what the bailee claims is due (para 7). Alternatively, under section 13 a bailee who satisfies the court that the bailee is entitled to sell under section 12, or would be had any required notice been given, may obtain an order authorising the sale on specified terms, allowing the costs of sale and amounts due from the bailor to be deducted, and directing the net proceeds into court to the credit of the bailor; in England and Wales the court is the High Court or the county court. On an application for summary judgment, a Deputy High Court Judge in Walton Family Estates Ltd v GJD Services Ltd [2021] EWHC 88 (Comm) at [65] read section 13 as allowing the court to order a sale whether or not a section 12 notice has been served, so long as the bailee would have been entitled to serve one.

How the courts have applied these ideas, and how much weight each decision carries. In Da Rocha-Afodu, decided by the Court of Appeal, a mortgage lender in possession of a repossessed house was left with the former owners’ belongings; the district judge held that a mortgagee who finds itself in possession of chattels on execution of a warrant for possession is in law an involuntary bailee ([9]), and the Court of Appeal upheld her conclusion that the lender had discharged its duty, having given the owners access on several occasions, several warnings and notices that it would dispose of what was left ([54] and [55]). The Court also described a decision of Hawke J ([42]) in which a rogue ordered goods for delivery to a well-known shop, went to the shop and intercepted them, and the shop handed them over and the rogue disappeared: the shop was held to be an involuntary bailee but was not liable in damages to the true owner because it had acted reasonably (Elvin & Powell Ltd v Plummer Roddis Ltd, which Da Rocha-Afodu cites at [41] as [1933] Solicitors Journal 48 and which this entry knows only as described there). In Walton Family Estates, which was an application for summary judgment heard by a Deputy High Court Judge, the judge said that if it could be established that aircraft were parked at an aerodrome unlawfully and there was no dispute about them, a claimant with a sufficient interest in the aerodrome could be regarded as an involuntary bailee ([63]); the conclusion was expressed to be “subject to being able to prove its case on the facts” ([66]). The judge also accepted that a bailor must be given a reasonable opportunity to collect the goods before the bailee sells ([64]), went on to grant summary judgment to the first claimant against two of the defendants ([159]), and said that even if the first claimant was a voluntary bailee there was no reason why it should not have recourse to section 13 ([154]). Crédit Agricole is a first-instance High Court decision on a Part 8 claim ([1], [16]) in which, as the judge noted, “there has been no adversarial argument in this case” ([84]). A bank and its predecessors appear to have held safety deposit boxes for between 44 and 122 years without being able to trace the owners ([2]). The bank accepted that it was originally a bailee of the items ([34]); the judge held that its contractual arrangements with its customers had come to an end by 2019 at the latest, under an implied term that the arrangements would cease if the customers or their successors in title were or became uncontactable and, despite reasonable efforts, could not be traced (reached for the items deposited before 1 January 1978 at [64]; [71] says the same finding applies equally to the later item), and that “Thereafter, the Bank stood in the position of involuntary bailee with respect to the Items” ([64]). For the items deposited before 1 January 1978 the judge was satisfied that the bank had done all that is right and reasonable and that it should be permitted to sell without comeback from the box holders ([65]); for the one box deposited after that date the statutory power under section 12 applied, as described above ([72]). The judge acceded to the bank’s request for declaratory relief, subject to discussing the precise terms ([85]), with the form of order to be settled at a further hearing ([88]).

Unsolicited goods sent to a consumer are dealt with by a separate statutory regime. Section 225 of the Digital Markets, Competition and Consumers Act 2024, in force from 6 April 2025, prohibits unfair commercial practices, and a practice listed in Schedule 20 is unfair in all circumstances (s.225(4)(c)). For that Chapter, “consumer” means “an individual acting for purposes that are wholly or mainly outside the individual’s business” (s.225(3)). Paragraph 31 of Schedule 20 lists “Supplying products to a consumer that have not been requested by the consumer and demanding that the consumer” pay for the products, return the products or safely store the products. Section 236 of the Act (“Inertia selling”), also in force from 6 April 2025 and extending to England and Wales, Scotland and Northern Ireland, applies where a trader engages in that practice, that is, where the trader supplies products that have not been requested and demands that the consumer pay for, return or safely store them. Under it, “The consumer is exempted from any obligation to pay for (or provide any other consideration for) the products supplied by the trader” (s.236(2)); “In the case of a supply of goods that has not been requested, the consumer may, as between the consumer and the trader, use, deal with or dispose of the goods as if they were an unconditional gift to the consumer” (s.236(3)); and the absence of a response from a consumer following the supply of the product does not constitute consent from the consumer to comply with the trader’s demand to pay for, return or safely store the product (s.236(4)). The inertia-selling rule in regulation 27M of the Consumer Protection from Unfair Trading Regulations 2008 is no longer in force: the 2024 Act revoked those Regulations from 6 April 2025 (s.251(1)), but the new Chapter applies only to an act or omission which takes place on or after the commencement date (s.252(1)) and the 2008 Regulations continue to have effect for any act or omission which takes place before it (s.252(2)). For all purposes other than the saving of Part 4A of the 2008 Regulations, the commencement date is the date on which section 225 comes into force (s.252(3)), here 6 April 2025. The Unsolicited Goods and Services Act 1971 defines “unsolicited”, in relation to goods sent to any person, as sent without any prior request made by that person or on their behalf (s.6(1)). Section 2 of that Act, which concerns goods sent for the purposes of the recipient’s trade or business, makes it an offence, in the course of a trade or business and without reasonable cause to believe there is a right to payment, to demand payment for what the person knows are unsolicited goods sent to another person with a view to that person acquiring them for the purposes of their trade or business, or to threaten legal proceedings or other collection steps for that purpose. Section 1 of the 1971 Act was omitted with effect from 31 October 2000, and the Act does not extend to Northern Ireland (s.7(3)). This entry does not say whether a business recipient, or someone sent goods meant for another person, is an involuntary bailee; that depends on the facts.