Introduction

Parking disputes are common. It can be frustrating to have an unauthorised vehicle parked at your property or residents parking at visitors parking spots.

This article explores the ramifications of payment notices and car towing.

Payment Notices

Carparks owners often have their terms and conditions displayed in their private carparks. Carpark owners normally claim that when visitors park in a private carpark that has appropriate signage, the visitors has entered into a contract with the carpark owner.

It is not uncommon for carpark operators to issue “breach of contract” notices or payment notices to overstayed vehicles or unauthorised vehicles owners or drivers claiming liquidated damages for failure to observe displayed terms and conditions of use. Are these payment notices enforceable?

There have been various cases,¹ which the Victorian Civil and Administrative Tribunal held that payment notices requiring payment of $88 for liquidated damages to overstayed drivers was a penalty and unenforceable. The tribunals were of the view that there was no evidence as to how $88 was a genuine pre-estimate of the damages suffered by the carpark operators.

However, a recent Australian High Court Case, Paciocco v Australia and New Zealand Banking Group Limited [2016] HCA 28² , indicated that overstay fees may be upheld if overstaying motorists reduced parking spaces available to other customers of retail outlets in the shopping centre and adversely affected the goodwill of the business of the operator of the carpark by inconveniencing other would-be users of the car park.

Therefore if a disgruntled vehicle owner brings a payment notice to court, the carpark owner will have a difficult hurdle to overcome in order to succeed in the claim. At the minimum, the carpark owner would need to provide evidence to justify that the “liquidated damages” were proportionate to the actual loss suffered by the carpark owner/ operator.

Should an unauthorised or overstay vehicle be towed?

We often see signs warning unauthorised vehicles that they will be towed away at the vehicle owner’s expense and risk in private carparks. If an unauthorised vehicle is towed and damaged during the process, will a disgruntled vehicle owner succeed in a claim for damages against the carpark owner?

A carpark owner may argue that a contract has been formed and the terms were breached by the visitor, or alternatively the carpark owner’s response to an overstay vehicle may be argued to be based on trespass. However, a court will not look favourably on remedies that are disproportionate to the actual loss suffered.

¹Vico v Care Park Pty Ltd (Civil Claims) [2014] VCAT 565; Barrett v Australian National Car Parks Pty Ltd & Others (Civil Claims) [2015] VCAT 1876,

²Paciocco v Australia and New Zealand Banking Group Limited [2016] HCA 28 refers to the UK case of ParkingEye Ltd v Beavis (Consumers' Association intervening) (reported with Cavendish Square Holding BV v Makdessi [2015] 3 WLR 1373; [2016] 2 All ER 519)

If the carpark owner elects to tow an overstayed vehicle, aside from the cost of towing the vehicle (which may not be recoverable), there will also be a risk that the disgruntled driver or owner of the towed vehicle will sue the carpark owner for losses and damages.

The owner or driver of a towed vehicle could possibly suffer multiple damages. For example, the cost of retrieving the vehicle, repair costs for damages to the vehicle while the car was being towed, and other unforeseeable damages because the driver was unable to use the vehicle as it has been towed. The loss of a car could also have severe consequences for an owner/driver, such as loss of employment, inability to attend health treatment, inability to collect children, etc.

Noting that case law does not always support even a relatively small payment notice, it may be difficult to convince a court the costs associated with towing is proportionate to the damages suffered by carpark owner.

Whilst in some limited situations (such as abandonment of vehicles) it may be justified in having a vehicle towed, without due process owners of private carparks risk claims for damage that are likely to far outweigh the benefit of removing a car from the carpark.

Conclusion

Regardless of whether the carpark owner’s rights are based in contract or in tort, the response to an overstay or unauthorised vehicle must be proportionate.

If you encounter problems with people parking at your carpark or have any other queries, contact our commercial law team at cpong@hopeearle.com.au or jhope@hopeearle.com.au.