Problem
The diamond
Henty Ltd, retail jewellers, took a large diamond to diamond cutters Piercy Ltd to be cut for a fee. Piercy told Henty's employee to return and collect it the next day. Piercy cut the diamond, locked it in their safe, and locked up for the night. That night a thief broke into Piercy's workshop and stole the diamond. Will Piercy be liable to Henty for this loss? Would your answer be different if Piercy's employee had been tricked into handing the diamond to a thief who produced a convincing forged letter of authority from Henty? Would it matter if the thief succeeded six months later, after Piercy had repeatedly asked Henty to collect the diamond?
issue
Is Piercy a bailee, what standard of care applies to a theft from its safe, who must prove the absence of fault, and do the forged collection and the long delay change that duty?
rule
Work done on goods for a reward is a bailment. The bailee must take the care the circumstances require: Houghland v R R Low; Sutcliffe. Once the bailor proves delivery and non-return, the bailee must prove the loss happened without fault: Coldman v Hill; Houghland; Volcafe. Handing goods to an unauthorised person, or failing to return them when asked, can be a deviation and then liability is strict: Edwards v Newland; Mitchell v Ealing LBC. An involuntary bailee, who never agreed to have the goods, is traditionally not liable for mere negligence: Howard v Harris; Hiort v Bott.
application
Piercy received the diamond to cut it for a fee, so this is a bailment for reward. Possession passed, Henty remained owner, and Piercy consented. Henty proves delivery and loss. Piercy must prove the burglary happened without its default. Locking the cut diamond in a safe and locking the workshop is evidence of the care a diamond cutter would be expected to take. If that is all the evidence, and nothing shows a failing such as a known weak lock or a key left out, Piercy can discharge the burden. If the court is left not knowing whether the precautions were enough, Piercy is liable, because the burden is on it. The forged letter is different. Piercy still holds as bailee. Its employee parted with the diamond to a person who was not Henty. That is a failure in the custody of the goods. Piercy must show that reasonable care would not have detected the forgery. A convincing forgery may do that. If a simple check with Henty would have exposed it, Piercy has not disproved negligence. Handing the stone to an unauthorised person can also be put as a deviation, which would make liability strict. The six-month delay does not make Piercy an involuntary bailee. Piercy agreed to take the diamond. The purpose, cutting and next-day collection, is long over, and Piercy has pressed Henty to collect. The duty is still reasonable care in those circumstances, which may be less demanding than on the night of the cutting, but the burden of disproving fault remains. Only if Piercy had never consented, as where goods arrive by mistake, would the traditional involuntary-bailee rule apply.
conclusion
Piercy is a bailee for reward and must disprove negligence. A locked safe can be enough if that is proved. Liability is much harder to escape if staff handed the diamond over on a forgery they could have checked. The delay does not end the bailment. It only colours what care was reasonable.