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Private Parking Problems. Can a Company Issue a Private Parking Fine?

By 18 October 2013Consumer Law

Private Parking Fines, Legal or Illegal?

In a case birthed from public outrage at private parking fines, the Director of Consumer Affairs Victoria v Parking Patrols Vic Pty Ltd & Anor [2012] VSC 137 (13 April 2012) decided by the Supreme Court of Victoria categorically states that a private parking operator cannot “levy fines” or “prosecute motorists who stay overtime” or “do not display a ticket.”

The case was initiated by Consumer Affairs Victoria on behalf of hundreds of complainants against ACE Parking in 2011. The Director of Consumer Affairs Victoria commenced proceedings against car park operators, ACE Parking Pty Ltd, Parking Patrols (Vic) Pty Ltd (formerly Parking Infringements Victoria Pty Ltd) and Ace Parking officers, Kevin John English and James John English. The Director alleged that respondents breached the Fair Trading Act 1999 for reasons that:

  • They are issuing `fines’ to consumers with no legal authority;
  • They are harassing consumers who failed to pay; and
  • They are illegally threatening consumers of legal action or `prosecution’ for non-payment of demand to pay.

What are Private Parking Fines? Is This Allowed?

In general, fines are monetary impositions issued by a Court for an offence. It includes the payment for any costs to be paid by the offender in connection with a proceeding. However, prior to the decision brought by the Director of Consumer Affairs Victoria, private parking operators also issued fines (some still do!).

For a long period of time, private car operators all over Australia issued “Private parking” fines. However, many private car park owners claimed they do not issue a fine; rather they issue a demand for “liquidated damages” for breach in the contractual term of entry.

What are Liquidated Damages?

As a defence, Ace Parking alleged that they don’t issue a fine; rather they issue a demand for “liquidated damages”. claiming the driver has breached the contractual term of entry. Ace Parking has 24 car parks in the Melbourne metropolitan area. It had leased vacant blocks of land, erected signage and installed parking ticket machines at the sites. It also claimed that consumers had breached the contract by not displaying a ticket and that the demand for payment represents the loss suffered by the company. It also suggest that by entering and parking a car in Ace parking areas, the driver had entered into a contract with the car park operator.

Under the law, damages and liquidated damages claims are common law remedies following a breach of a contract. Damages for breach of contract are viewed as a ‘substitute’ for performance. On the other hand, liquidated damages are available in contractual obligations where a clause in the contract provides that a particular sum of money will be payable upon breach; provided that the sum specified does not constitute a ‘penalty’.

The Supreme Court decision suggests that car park operators have no legal authority to make demands for such liquidated damages.

The Court’s Decision

In its decision, the Court finds that the terminology used on ACE Parkings’ tickets is misleading and deceptive. Consumers are misled about their rights which contravened Part 2 of the Fair Trading Act 1999 by making false and misleading representations, and engaging in undue harassment and coercion.

Where Does the Law Stand Now?

The decision favors the Consumer Affairs Victoria and rules against Ace Parking.  The court found that private companies:

  • Are not permitted to use terms such as “fine”, “penalty”, “offence” or similar terms that imply you have committed a crime.
  • Are not allowed to mimic government or council documents.
  • Have no power to demand statutory declarations from owners of cars.
  • Cannot demand money from the owner of a car if the owner was not the driver.
  • Cannot claim breach of casual user’s contract from drivers who parked in permit areas of a private car park such as disabled parking bays.

The decision will serve as a reminder to private car parking operators all throughout Australia to reconsider their position. The Court further explained that threats of unpaid demands leading to legal proceedings constitute undue coercion, which violates the Fair Trading Act. Further, the Court made orders to compensate or refund to the complainants the amount of $300.

The decision is a definite win for consumers. It prevents them from being hit with an unjust private parking fine. This doesn’t mean you don’t have to pay to park in a private carpark, but it does mean that the process of aggressive fines should come to an end.

If you have been slogged with a private parking fine you should consult a solicitor for legal advice. The above information is general information on one specific case and should not be used in the place of legal advice.