News

Key points:

• Private car parks cannot ‘fine’ consumers
• Carefully consider your options if you get a demand for payment from a private car park
• As of 26 August 2015, there are restrictions on private car park operators in Victoria accessing your name and address from the VicRoads registration database. Without your name and address, they will not be able to issue demands for payment.[/box]

A number of car parks operated by private companies operate in Victoria, usually attached to shopping centres. Generally, they allow consumers to park for free for up to a certain time period, for example, two hours, if they display a ticket on the car. They normally charge for extra time in the car park, at around $3 per hour.

These companies have been issuing demands to consumers who fail to display a ticket on their car. The amount of the demand is usually around $66. This amount increases to $88 if the consumer fails to pay within 14 days. Should the consumer continue to ignore the requests for payment, the companies instruct solicitors and/or debt collectors and further sums are demanded. Eventually, court action is threatened for a sum in the region of $300.

No statutory authority to issue fines

Private car park operators do not generally have statutory authority to ‘fine’ consumers.

Private car park operators base their demands for payment on an alleged breach of contract. That is, these companies say that a consumer enters into a contract to park their car in a company’s car park, where it is a term of the contract to display a ticket. The company alleges that the consumer breaches the contract by not displaying a ticket and the demand for payment represents the loss suffered by the company.

While the legal position is unsettled, we take the view that if there is a binding contract – which may or may not be the case – the certain terms of that contract are arguably unfair and the amount demanded is a penalty rather than a genuine assessment of the company’s loss.

What to do?

Consumers who are being pursued for payment of ‘liquidated damages’ as a result of allegedly breaching the terms of operation of a private car park have a number of options:

1) Do nothing.

Up until 26 August 2015, if you did nothing and did not write and provide your personal contact details to the company, the company would have needed to apply to the Magistrates Court to obtain your details from Vic Roads.

It may be that this extra step would have deterred the private car park operator from taking action against you. However, we are aware that some companies have taken such steps and obtained details of drivers in this manner.

As of 26 August 2015, these companies are restricted from obtaining your details from Vic Roads in this way. While the law has changed, companies who obtained your personal details before 26 August 2015, may still contact you demanding payment.

In our experience, it is unlikely that a private car parking company will sue you in Victoria for one-off parking fines, despite their threats to do so.

However, we have been contacted by consumers who have been sued for racking up hundreds or thousands of dollars worth of fines.  In the event that you are sued, you should contact us for help.

2) Write to the company.

If you were not the driver when the fine was allegedly incurred, you can write to the company claiming the ‘fine’ and disclose this fact and identify the driver of the vehicle at the time. The company may then pursue that person for payment. Denying liability on this ground is of course not likely to be successful unless you identify the other driver.

WARNING: if you received the initial parking ticket (‘fine’) after 26 August 2015, the company will be unable to get your contact details from the VicRoads registration database. However, if you write to the company, it will then have your contact details.

3) Issue legal proceedings in VCAT.

If you want to get on the front foot, you can issue proceedings in the Victorian Civil and Administrative Tribunal (VCAT). By taking your dispute to VCAT, you allow the matter to be litigated in a less formal and lower cost jurisdiction. However, this also has the disadvantage of bringing the dispute to a determination, when you may never have been sued. Consumer Action has taken one test case to VCAT, which settled before hearing by the car park operator refunding the entire amount of the ‘fine’ paid.

We have received reports from numerous consumers who have refused to pay and sued private car parking companies in VCAT. The companies involved waive the ‘fine’ rather than risk a hearing.

A VCAT template argument is set out below. We believe the arguments contained in this template are based on sound legal reasoning, but they have not been considered by a judge or member of VCAT and we cannot be certain that you would succeed if a hearing were to eventuate. Care must be taken in completing this template, which will need to be amended to suit particular circumstances.

REMEMBER, if the ‘fine’ was incurred after 26 August 2015, the company will be unable to get your contact details from the VicRoads registration database. It cannot demand payment or sue you unless it has these details.

If the “fine” was issued before 1 January 2011, please refer to the sample pleading template A.

If the “fine” was issued on or after 1 January 2011 and before 26 August 2015, please refer to the sample pleading template B.

For more information about VCAT, see our fact sheet: Dispute Resolution: Consumer Disputes in VCAT

For information on how to issue a claim please refer to www.vcat.vic.gov.au where you will find a Civil List application form and guideline. VCAT’s free telephone number is: 1800 133 055.

VCAT finds Care Park $88 “fine” a penalty and unenforceable

On 2 May 2014, the Victorian Civil & Administrative Tribunal (VCAT) ordered that Care Park’s claim of $88 of “liquidated damages” in relation to breach of a car park contract was a penalty and therefore unenforceable. In the case of Vico v Care Park Pty Ltd (Civil Claims) [2014] VCAT 565, Member Wilson, therefore, ordered that the consumer, Mr John Vico, did not have to pay the $88 amount to Care Park. Member Wilson did not accept Care Park’s evidence in relation to how it justified the $88 amount and found that its claim for loss was “overstated”. The Member also found the $88 amount was “wholly unexplained”, with “no forensic veracity” and “no legal or factual providence”.

Consumer Action is not aware of this decision having been appealed. Therefore, if you receive a demand for liquidated damages from Care Park, or another private car park, it is open to you to rely on this case in your letter to the car park, or your VCAT submission. Please call the Consumer Action advice line for further information on 1800 466 477 – Mon, Wed, Thur, Fri between 10am-1pm.

4) Pay the debt.

To avoid any risk of legal proceedings you can pay the amount demanded in full.

Alternatively, you could offer a partial payment in full and final settlement of the dispute – e.g. payment of an amount you are happy with.

If you wish to pursue this course of action you must state clearly in a letter (note that you will be volunteering your personal contact details) to the company that acceptance of the sum offered constitutes full and final settlement of the dispute. If you neglect to write this, you may still be chased for the remainder of the debt. If the operator refuses to accept the compromised settlement, you always have the option of finalising the matter by paying the remaining balance of the full amount owing, or proceeding in VCAT.

In addition, you are encouraged to write a letter of complaint to:
Director of Consumer Affairs
Consumer Affairs Victoria
GPO Box 123 Melbourne 3001

How will your credit rating be affected?

A debt owed due to breach of contract of the kind considered here is not a debt which can appear on a consumer’s credit report.

What should you do if you are sued in the Magistrates Court?

We are not aware of the companies issuing proceedings for individual ‘fines’. However, some consumers have been sued where they have incurred hundreds or thousands of dollars worth of ‘fines’. In the event that this does happen to you, seek legal advice.

It is the right of any consumer to defend proceedings by filing a Defence within 21 days of being served with the court complaint. However, there are some costs consequences of having the matter heard in the Magistrates Court.

If you are sued in the Magistrates’ Court, you can either contact us for further assistance – you may be able to take advantage of a transfer procedure available under section 189 of the Australian Consumer Law and Fair Trading Act 2012 (Vic), whereby the proceedings in the Magistrates Court can be transferred to VCAT, provided you first pay the sum claimed to VCAT in trust.

If the proceedings in VCAT are resolved in your favour, the money will be refunded to you.

Director of Consumer Affairs Victoria v Parking Patrols Vic Pty Ltd

In 2012, the Supreme Court of Victoria found that between about March 2007 and March 2010, Ace Parking Pty Ltd and other companies and people related to it, engaged in misleading or deceptive conduct by (amongst other things):

• using documents which were likely to mislead users of their car parks about the nature of their authority to demand payment;
• representing that an owner of a car had entered into a contract with Ace parking when that owner’s car was driven into, and parked in, an Ace Parking car park by someone else when that is not the case; and
• representing that, by entering and parking a car in an Ace Parking car park, the driver had entered into a contract with Ace Parking which included certain onerous terms, when that is not the case.

The declarations in the Parking Patrols case do not necessarily have application to other car parks.

Further advice and assistance

Consumer Action Law Centre
Telephone: 1800 466 477

Online: use our chatbot by clicking the Chat with Us box at the lower right on this page.

If you are deaf or have a hearing or speech impairment, you can  call through the National Relay Service (NRS):

• TTY users can phone 133677 then ask for 1800 466 477
• Speak & Listen (speech-to-speech) users can phone 1300 555 727 then ask for 1800 466 477
• Internet relay users can connect to NRS on www.relayservice.com.au then ask for 1800 466 477

Victorian Civil & Administrative Tribunal (VCAT)
General Tel: 9628 9700
Civil List Tel: 9628 9830
Country callers: 1800 133 055
www.vcat.vic.gov.au

Consumer Affairs Victoria
Tel: 1300 55 81 81
www.consumer.vic.gov.au

Warning: This fact sheet is intended as a guide to the law and should not be used as a substitute for legal advice. This information applies only in Victoria and reflects the law as at 31 December 2015.