A close friend recently sought my advice regarding a parking fine an inspector placed on his vehicle after he had innocently overstayed his welcome at his local private car park. The ticket stated that he was required to pay the sum of $88 in liquidated damages to the car park management company for breaching their terms and conditions.

But this got me thinking – on what basis can they claim $88? And why is it always the magic figure of $88? 

The Basics

There are two types of parking fines – those issued by enforcement agencies and those issued by private operators. Enforcement agencies have legal authority to issue infringement notices. Interestingly, “enforcement agencies” are not just the police or local councils, but include universities, TAFEs and some hospitals. Under the Road Rules, the penalty for disobeying parking instructions or signs is up to two penalty units (which equates to about $303 at present).

You have the right to contest the infringement offence alleged against you in court, but if you simply bury your head in the sand and don’t pay, it will escalate to the point where they can clamp your vehicle or throw you in the slammer.

Parking tickets issued by private car parks, however, are an entirely different kettle of fish. English law, going back, adopted the position that penalty clauses in agreements were unenforceable. This is particularly interesting because English (and later Australian) law usually takes the view that parties are free to contract with each other on their terms. So, if you choose to pay $700 for a pair of shoes just because they have a 1mm x 1mm logo on them – you can’t then later argue that they were overpriced.

However, if you enter into a contract which penalises you for any breach, then the party cannot enforce that clause against you. But what constitutes a penalty? In essence, a penalty clause is any term which would require you to pay compensation that is beyond the loss the other party suffered due to your breach or default. The court won’t necessarily enforce the clause, but you will still be held liable for the loss the other party suffers (or you may be ordered to keep the promise you made in the contract).

Consequently, private car park operators can’t claim any amount from you that does not represent the actual (or a genuine estimate of) damages suffered due to your actions, and the onus of proving the value of the loss rests with them.

If this wasn’t as sweet to your ears as Radiohead’s new album, then wait until you hear about the Road Safety Amendment (Private Car Parks) Act 2015 (Vic) (‘the Act’). This legislation was brought into effect in August 2015, according to the Victorian Minister for Families and Children (‘the Minister’), to “protect Victorians from the unfair and misleading practices of some private car park operators”. The Act abolishes the right to obtain a court order requiring VicRoads to disclose the names and addresses of vehicle owners for the purpose of the recovery of private car park fees.

According to the Minister, private car park operators have been using a court process known as preliminary discovery to obtain the contact details of car owners they wish to pursue. The preliminary discovery process permits a court to make an order requiring a third party to disclose information which will assist a prospective plaintiff to identify a defendant so that he/she/it can commence a proceeding against the person/company identified. Applicants are supposed to use this in cases where they have a bona fide claim but haven’t ascertained who exactly to commence an action against. In short, you can obtain the order without the prospective defendant having a say. 

The problem is that the private car parks weren’t using the contact details they obtained from VicRoads to sue people – they were mostly just using them to send letters of demand for sums of unjustifiably large money – but we’ll get to that later.

Does This Mean Private Car Parks Will Never Be Able to Find Me if I do a Runner?

Unfortunately, no. When I sat down to think about this question, it occurred to me that there are other ways that private car parks could skirt around this legislation. Firstly, the law only prevents car park owners from getting court ordered information from VicRoads. 

Clearly, other organisations would have our car registration and contact details – such as car finance companies. Those of us who obtained finance (i.e. a car loan) to purchase our cars in recent years would have been required to permit the finance company to register a security interest against the vehicle on the Personal Property Securities Register (‘the Register’). The Register allows public users to search motor vehicle registrations by VIN/Chassis number (and the VicRoads website allows people to obtain a VIN/Chassis number via a registration number search) to find out whether security is held over the vehicle.

Additionally, for those who overstay their welcome in a private car park and paid for their original ticket or allocated parking time with a credit card, the car park owner would likely be able to follow up with the credit card company.

So, the car park owner would still be able to seek a court order requiring those third parties (namely your finance company or credit card provider) to disclose your contact details – because the law only stops them from obtaining orders against VicRoads.

Lastly, the Act does not apply to the recovery of amounts “alleged to be payable under the terms and conditions of a contract that is in writing and signed by the relevant parties”. So if the car park can get you to tick a box on a touch screen as you enter, there is potential for the car park owner to circumvent the Act.

But Would a Court Still be Willing to Grant a Private Car Park Owner an Order for Preliminary Discovery?

Well, that would need to be assessed on a case by case basis. However, it would be wise for any court considering such an application to pay heed to the conditions imposed by Perram J in the Dallas Buyers Club case. In that case, Justice Perram ensured that the film’s owner would not send ‘speculative invoices’ (i.e. demands for amounts more than what could be recovered under the law) to those people who had allegedly infringed upon its copyright by downloading or sharing the film online.

So, Let’s Get Back to Our Original Question – Where Does the Figure of $88 Come From?

Yolanda Torrisi, Customer and Public Relations Manager of Care Park Pty Ltd (‘CP’) which operates more than 300 car parks around the world, including Melbourne CBD, addressed that very question.

This occurred when an aggrieved customer took CP to VCAT. To quote from the decision of Member Wilson in that case, “She [Torrini] said that the sum of $88 represented a reasonable estimate of the loss caused to CP when a person failed to pay for parking.” The Member then continues, “She did not give any explanation of the arithmetic by which that figure was arrived at…Further, nowhere in the evidence was proof adduced of any financial basis for the sum of $88…Its genesis was wholly unexplained. It had no forensic veracity. As far as I can tell it was a sum CP fastened on by CP with no legal or factual providence.”

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It seems that we may never know the answer to some questions. But for all other commercial law queries, get in touch with our commercial and business lawyers on 1300 544 755. 

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