BBC1 Wed 10 July Your Money, Their Tricks

Coupon-mad

Orrin wrote: »

Certainly not, but it's clear that the issue isn't as straightforward as "free car park no contract".

Judge Hegarty disagrees:
Quote:
If this is the price payable for the privilege, it does not seem to me that it can be regarded as a penalty, even though it is substantial and obviously intended to discourage motorists from leaving their cars on the car park for any lengthy period of time.

Judge Hegarty QC should perhaps get back to the drawing board?!



In the case of Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd, Lord Dunedin offered as tests which might prove "helpful, or even conclusive":

"(A) It will be held to be penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach..….

(B) It will be held to be a penalty if the breach consists only in not paying a sum of money, and the sum stipulated is a sum greater than the sum which ought to have been paid ….. This though one of the most ancient instances is truly a corollary to the last test. Whether it had its historical origin in the doctrine of the common law that when A. promised to pay B. a sum of money on a certain day and did not do so, B. could only recover the sum with, in certain cases, interest, but could never recover further damages for non-timeous payment, or whether it was a survival of the time when equity reformed unconscionable bargains merely because they were unconscionable ….. is probably more interesting than material.

(C) There is a presumption (but no more) that it is penalty when "a single lump sum is made payable by way of compensation, on the occurrence of one or more or all of several events, some of which may occasion serious and others but trifling damage".


And in Lordsvale Finance Plc v. Bank of Zambia [1996] QB 752, 762G,
discussing Dunlop:

"whether a provision is to be treated as a penalty is a matter of construction to be resolved by asking whether at the time the contract was entered into the predominant contractual function of the provision was to deter a party from breaking the contract or to compensate the innocent party for breach. That the contractual function is deterrent rather than compensatory can be deduced by comparing the amount that would be payable on breach with the loss that might be sustained if breach occurred."

This statement has been approved by the Court of Appeal in Murray v Leisureplay plc [2005] IRLR 946.



And from the Office of Fair Trading, Guidance re Unfair Contract Terms:
''It is unfair to impose disproportionate sanctions for breach of contract. A requirement to pay more in compensation for a breach than a reasonable pre-estimate of the loss caused to the supplier is one kind of excessive penalty. Such a requirement will, in any case, normally be void to the extent that it amounts to a penalty under English common law...''

Orrin

HO87 wrote: »

As you correctly identified the judge's comments are entirely obiter - and the judge's own words make that clear. Persuasive? Conceivably, but most certainly not binding. The contents of the signs and their import were never examined and para. 47 forms part of the judge's enumeration of the history of the case and forms no part of his decision. Unless the signs are carefully crafted (and many that have been discussed on this board do not deserve that title) then there is no contract and there can be no breach (aside from any reference to penalty or allusion to deterrence).

I have no intention of expanding on the description of "carefully crafted".

Obviously it's possible to put up signs which do not create a valid contract, but my argument was against bazster's assertion that a valid contract could never be created in a free car park. It seems we agree.

Coupon-mad, the judge's comments you highlighted refer to the parking charge being the agreed price of parking and not a penalty for breach of contract so those cases aren't relevant.

nigelbb, yes it may be impossible to argue there was a contractually agreed charge for parking outside a marked bay etc. but I don't think you can say the same for an overstay, which of course is the most common charge the PPCs try to make.

I'm not arguing that the Somerfield case sets a precedent but it does show that just because it's a free car park doesn't mean there cannot be a contract or that a charge for overstaying must be a penalty for breach of contract.

Custard_Pie

Orrin wrote: »

Obviously it's possible to put up signs which do not create a valid contract, but my argument was against bazster's assertion that a valid contract could never be created in a free car park. It seems we agree.

Coupon-mad, the judge's comments you highlighted refer to the parking charge being the agreed price of parking and not a penalty for breach of contract so those cases aren't relevant.

nigelbb, yes it may be impossible to argue there was a contractually agreed charge for parking outside a marked bay etc. but I don't think you can say the same for an overstay, which of course is the most common charge the PPCs try to make.

I'm not arguing that the Somerfield case sets a precedent but it does show that just because it's a free car park doesn't mean there cannot be a contract or that a charge for overstaying must be a penalty for breach of contract.

At the end of the day IMHO PPC use the term "parking charge notice" on purpose to deceive a person into believing that they are getting a parking ticket. If they were forced to change the wording to "request for monies" or "parking invoice" then their income would drop dramatically and they would soon go out of business.

Coupon-mad

Orrin wrote: »

Coupon-mad, the judge's comments you highlighted refer to the parking charge being the agreed price of parking and not a penalty for breach of contract so those cases aren't relevant.

The comments are about Parking Eye so can't mean that at all. Parking Eye have never used that business model.

Custard_Pie

Apollonia wrote: »

Next week's edition of Your Money, Their Tricks will include an item about private parking companies - should be of interest to many on this board.

Edit: It's on tonight, BBC1 8pm. The link is to the BBC page about tonight's programme:

http://www.bbc.co.uk/mediacentre/latestnews/2013/your-money-their-tricks-release.html

The most interesting thing for me was that The Beeb claim that 70% of people pay up without question. If these Scammers were forced to word their letters or tickets as invoices for breach of contract, I wonder what that figure would be?

Assuming at £100 per invoice, on average, that's £7k to the PPC per 100 they invoice. Not a bad scam if you think about it....