Dear District Judge xxxxxxx, Re: Claim number xxxxxxxx - hearing date set for xx/xx/2020 Important Preliminary matter and Witness statement and evidence from the Defendant (served by email due to COVID_19 measures) I am the Defendant. The appended witness statement and evidence bundle, as well as this covering email, has also been sent to the Claimant's litigation team. In the event of directions for a future hearing in person at this court, hard copies will be provided when I have access to a printer. Preliminary matter I am aware that there is more than sufficient information available in this case to activate the court's duty, as set out in s71 of the Consumer Rights Act 2015 ('the CRA'). The CRA imposes a duty upon courts in all consumer contract cases, to apply the test of fairness in s71 of the CRA and I draw specific attention to more than one breach of CRA Schedule 2, as explained in my witness statement. Due to this, and to remove an unnecessary burden on the court, I invite the Judge who may at this stage be considering an Order for a Telephone Hearing or adjournment, to instead exercise the court's case management powers pursuant to CPR 3.4, to strike this claim out without a hearing in any format. This has already occurred in multiple parking claims in recent months, with duplicate reasons used by Judges sitting at courts as widely spread as Southampton, Warwick, IOW, Caernarfon, Luton and Skipton. Failed applications with hearings attended by two barristers acting on behalf of parking firms have taken place at Skipton (February 2020, before District Judge Faye Wright) as well as at Southampton, before District Judge Grand. I refer to my exhibit transcript of the Approved Judgment in Britannia Parking Ltd v Crosby and Anor (11/11/2019) which pays regard to the Supreme Court binding case law and the duty on the courts to invoke s71 of the CRA. This parking charge claim has been deliberately exaggerated to reach a global sum of £160 despite the Claimant and their legal advisers being well aware by now, that such a sum is unrecoverable in parking charge cases because it is an attempt to go behind case law and statute law, and taints the entire claim. As such, the Defendant draws attention to the Claimant's continued 'forum shopping' and their clear intention of finding victims who will pay in full without defending, or a less than competent court to allow them to claim a sum far higher than they can lawfully recover. Further, there has been no serious attempt to comply with the CPRs and the Claimant's incoherent, stylised particulars do not constitute compliance. These cases unnecessarily delay and clutter court listings and represent a contemptuous and significant abuse of process. To assist with the efficient disposal of the case, I attach an editable (Word Document) Draft Order. For the avoidance of doubt, should the court decide against striking the claim out, I am not in agreement with the case being heard 'on the papers' because: (a) this claim is following the usual oppressive parking robo-claim path, with a very sparse statement of case, later followed by a case made by way of ambush, with a tendency to produce prolix witness statements, right at the death. This places Defendants at a huge disadvantage, given the first time they see any 'evidence' is at completion of the bundle, and their only chance to point out that large parts of the evidence are completely irrelevant, is at trial.
Transcript
Dear District Judge xxxxxxx, Re: Claim number xxxxxxxx - hearing date set for xx/xx/2020 Important Preliminary matter and Witness statement and evidence from the Defendant (served by email due to COVID_19 measures) I am the Defendant. The appended witness statement and evidence bundle, as well as this covering email, has also been sent to the Claimant's litigation team. In the event of directions for a future hearing in person at this court, hard copies will be provided when I have access to a printer. Preliminary matter I am aware that there is more than sufficient information available in this case to activate the court's duty, as set out in s71 of the Consumer Rights Act 2015 ('the CRA'). The CRA imposes a duty upon courts in all consumer contract cases, to apply the test of fairness in s71 of the CRA and I draw specific attention to more than one breach of CRA Schedule 2, as explained in my witness statement. Due to this, and to remove an unnecessary burden on the court, I invite the Judge who may at this stage be considering an Order for a Telephone Hearing or adjournment, to instead exercise the court's case management powers pursuant to CPR 3.4, to strike this claim out without a hearing in any format. This has already occurred in multiple parking claims in recent months, with duplicate reasons used by Judges sitting at courts as widely spread as Southampton, Warwick, IOW, Caernarfon, Luton and Skipton. Failed applications with hearings attended by two barristers acting on behalf of parking firms have taken place at Skipton (February 2020, before District Judge Faye Wright) as well as at Southampton, before District Judge Grand. I refer to my exhibit transcript of the Approved Judgment in Britannia Parking Ltd v Crosby and Anor (11/11/2019) which pays regard to the Supreme Court binding case law and the duty on the courts to invoke s71 of the CRA. This parking charge claim has been deliberately exaggerated to reach a global sum of £160 despite the Claimant and their legal advisers being well aware by now, that such a sum is unrecoverable in parking charge cases because it is an attempt to go behind case law and statute law, and taints the entire claim. As such, the Defendant draws attention to the Claimant's continued 'forum shopping' and their clear intention of finding victims who will pay in full without defending, or a less than competent court to allow them to claim a sum far higher than they can lawfully recover. Further, there has been no serious attempt to comply with the CPRs and the Claimant's incoherent, stylised particulars do not constitute compliance. These cases unnecessarily delay and clutter court listings and represent a contemptuous and significant abuse of process. To assist with the efficient disposal of the case, I attach an editable (Word Document) Draft Order. For the avoidance of doubt, should the court decide against striking the claim out, I am not in agreement with the case being heard 'on the papers' because: (a) this claim is following the usual oppressive parking robo-claim path, with a very sparse statement of case, later followed by a case made by way of ambush, with a tendency to produce prolix witness statements, right at the death. This places Defendants at a huge disadvantage, given the first time they see any 'evidence' is at completion of the bundle, and their only chance to point out that large parts of the evidence are completely irrelevant, is at trial.
(b) the case of JD Wetherspoon Plc v Harris and others [2013] EWHC 1088 (Ch.) is an example of the Court using its power to limit the evidence by striking out large parts of a witness statement for abuse, because it was written by a person with no personal knowledge who recited facts based on the documents he had read. Similarly, parking charge witness statements contain template legal argument, misleading reliance upon ParkingEye v Beavis and even more irrelevant case law, and are more designed to stand in terrorem of defendants than to assist the Court in determining the substantive issues. (c) Such 'witness statements' lack probative value and are very often created by freelance legal writers and 'signed' (or facsimile 'signed') by a third party who is not a witness in the true sense, and who relies upon misleading and irrelevant extracts of case law and undated, old or 'stock' images of signs, some of which are often not even present at the location in question. (d) In my case, I strongly believe that I must be afforded a fair opportunity to rebut the inaccuracies in the 'evidence' re the car park location/event and highlight the failure to demonstrate a prominent/legible contract, or liability, or legitimate interest. I am the only local witness, in the true sense, and I believe that, if the claim is to be heard, a decision cannot be fairly made without a hearing in my presence. If the claim is not struck out, I would prefer a hearing in person once the pandemic lockdown is lifted. However, I understand that to formally ask for an adjournment would be at a disproportionate cost which is not an option for me, so I await the court's Order and Directions. yours sincerely, Your name Documents appended herewith: DRAFT ORDER: A single PDF file containing: - Filed Defence - signed/dated witness statement - Supplemental Witness statement (setting out the abuse of process issue separately) - Britannia v Crosby & Anor - Approved Judgment - Consumer Rights Act 2015 Schedule 2 - Supreme Court Beavis case paras 98, 193 and 198 - ParkingEye Ltd v Somerfield Stores Ltd [2012] EWCA Civ 4023 [QB]
Witness Statement 1
of
(Defendant)
Claim
In the Leicester County Court
1. I am of I am the Defendant in this case.
2. On the 13th august 2019 I purchased the vehicle, registration make (Mini).
3. On the following day, 14th August 2019 I sold the vehicle, registration mark (Fiat).
4. On the 10th October 2019 I parked my Mini, registration mark (Mini) in the Marco Island, Huntingdon Street Car Park in Nottingham
5. I had previously parked in this car park and was already registered to use the pay by telephone service / card service.
6. I attempted to Purchase a ticket to pay for parking using the automated service and added my new vehicle ( ) details to the system as I previously parked in this car park with my old vehicle
7. I experienced technical difficulties in making the payment but eventually received confirmation I had paid £4.70 for the days parking and received a text confirmation of this. I no longer have this text message.
8. A bank statement shows a debit of £4.70 to HX Car Park Management for a payment, the statement entry is on the 11th October 2019, it is not uncommon for transactions to appear on statements the following day – exhibit ED/01
9. The first communication I received relating to the allegation of failure to comply with the parking regulations was the claim form issued 8th June 2020.
10. I was not afforded the right to appeal regarding the alleged parking event.
11. Upon receipt of the filed claim form I contacted the claimant’s legal representatives by phone to ask what this was about as I recalled and the bank statement confirmed I had paid for parking.
12. The claimant’s legal representatives advised that it was now too late to do anything about it as legal proceedings had been commenced and I would have to deal with the court requirements.
13. I then attempted to contact the claimant directly by phone but was unable to do so, as a result I attempted to, and managed to contact the claimant via the ‘on-line chat’ facility on their website on the 12th June 2020 – exhibit ED/02
14. Exhibit ED/02 demonstrated that the claimant received a payment from me however it was assigned to the wrong vehicle registration number (VRN), namely vehicle I sold on 14th
August 2019.
15. The claimant advised they could no longer do anything about this now and the only option isfor me to engage with the claimants legal representatives.
16. I made a subject access request to the claimant on the 21st June 2020 in order to see detailsof the alleged parking violation as I had received nothing prior to the notification of theclaim.
17. I once again contacted the claimant on the on-line chat facility on the 22nd June 2020 [ED/03]In this communication I advised she had not been afforded the right to appeal the allegedparking violation as I had not received any communication prior to notification of the filedclaim, the claimants did not offer any appeals process.
18. I contacted the claimants legal representatives with a copy of the payment on the bankstatement advising this appeared to be a simple mix up could they please discontinue theclaim.
19. On the 10th July 2020 the claimant’s solicitors replied and enclosed a list of all vehicleregistrations which had parked in the car park on said alleged non-payment date of 10th
October 2020. Exhibit [ED/04]
a. Thank you for your correspondence.
Please find attached a whitelist showing a search for your vehicle registration at MarcoIsland, This shows that there was no payment registered under your vehicle on this date.
We have also attached a further whitelist showing all payments made on this date.
The charge is therefor valid.
20. I replied to the claimants legal representatives [ED/05] advising that entry 111 on the ‘whitelist’ [ED/04] of vehicles that paid on the day in question included my old vehicle which wassold on the 14th August 2010 and was not in the car park - thus demonstrating that apayment had been made but the systems seems to have allocated the record of payment tothe wrong vehicle registration number.
21. The claimant states in their on-line chat [ED/02] that they are unable to verify that my oldvehicle was not in the car park on the dates in question as they no longer hold the data ofvehicles which correctly paid. As a result the claimant is unable to confirm that my oldvehicle was not in the car park on the day in question that the payment made andincorrectly assigned to the old VRN and not my new vehicle VRN.
22. I have a written communication from the new registered owner and keeper of my previous vehicle ( )which confirms their vehicle was not in the car park on the alleged parking violation date. [ED/06]
23. The communication I sent to the claimant’s legal representatives on the 10th July [ED/05] I advised they felt they had provided sufficient information for the matter to be discontinued by the claimants and/or their legal representatives. I advised that they felt the claim made the claimant meets the grounds of ‘unreasonable behaviour’ as detailed in Is defence;
a. (a) Standard witness costs for attendance at Court, pursuant to CPR 27.14, and (b) that any hearing is not vacated but continues as a costs hearing, in the event of a typical Notice of Discontinuance. I seeks a finding of unreasonable behaviour in the pre-and post-action phases, by this Claimant. Pursuant to CPR 46.5, whilst indemnity costs cannot exceed two thirds of the applicable rate if using legal representation, I notes that LiP costs are not necessarily capped at £19 ph. It is noted that a I may ask in their Summary Costs Assessment for the court to award their usual hourly rate for the many hours spent on this case [ref: Spencer & anor v Paul Jones Financial Services Ltd].
24. It would appear the claimants legal representatives are not familiar with the recorded on-line communication with the claimant via the online chat facility [ED/02 & ED/03] which clearly advised that I had made a payment and it may have been wrongly allocated by the system to the wrong VRN.
25. The claimants legal representatives replied on the 3rd August [ED/07] advising that the will not be dropping the case despite acknowledging a payment having been made and brought to their attention.
26. The claimant and/or their legal representatives has failed to provide any proof that any communication was sent prior to filing the legal claim
27. Despite advising the claimant repeatedly that I have not been afforded an appeals process due to the claimant failing to send the required communications prior to legal action the claimant continues to fail to offer an appeals process or accept that an error has been made and a payment has been made for parking over the period in question.
28. I believe that the facts stated in this witness statement are true. I understand that proceedings for contempt of court may be brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.
Signed …………………………………………………………………………………. Dated……………………………………
Exhibits to
Witness Statement 1
of
(Defendant)
Claim
In the Leicester County Court
Exhibit ED/01
Exhibit ED/02
1
Chat transcript Name E-mail: We would love to keep in touch with you, but under new General Data Protection Regulations, weneed you to ‘opt-in’ by ticking this box. AgreeHX Car Park Management Fri, 06/12/20 01:54:25 pm UTC Hello, thank you for visiting HX Car Park Management. Can I help you with anything today? Defendant 01:56:38 pm Hello! I’ve received notice of a claim against me from the county court. It is the first I knew of anything. The particulars don’t explain what I was in breach of to accrue a PCN in the first instance. Could you please advise me so I can consider my position. My mobile number is should you wish to call. Thank you in advance,
HX Car Park Management 01:57:07 pm Do you have the PCN reference or vehicle registration so I can look into this for you? Defendant 01:57:54 pm Certainly- lots of numbers on here- VRN is HX Car Park Management 01:58:08 pm Thank you , I'll look into it now The PCN was issued due to no payment being registered for the vehicle when it was parked at Marco Island Car Park in Nottingham on 10th October 2019. We have sent 3 letters previously to the address provided to us by the DVLA. Defendant 02:02:20 pm 929D4F6B-3D2B-4300-9A5E-53F2317A2445.png I haven’t received any letters. I wasn’t sure if it was no payment received or if I’d
parked somewhere I should’ve have. I did pay however, I paid £4.70.... i remember I 2 had problems doing so and had to use a different card..... this is the payment proof which went out the following day. HX Car Park Management 02:05:26 pm On 10th October 2019 there is no payment that matches your vehicle registration above, which is why the PCN was issued. I have just checked and there are no payments at all matching for the day after either. The signage states that for a valid payment, you must enter the full vehicle registration of the vehicle that is being parked on the land. As this is now with Gladstones solicitors, we are no longer dealing with it, therefore you will need to contact them on 01565 755088 Defendant 02:07:55 pm I have spoken to them yesterday but they couldn’t explain the reason the charge was issued. Thank you for clarifying it was a payment issue. I wonder if the payment was connected to my previous car- May I ask you to check? I have previously parked at the car park with my fiat 500, which I sold in August..... does my payment show it was connected to VRN please? Xx HX Car Park Management 02:09:21 pm There is a payment showing for that VRN however as it does not match the vehicle that was parked, that is why a PCN was issued. Defendant 02:10:14 pm I see. That’s helpful- I now understand the problem. Can you confirm that vehicle was not parked there that day please? HX Car Park Management 02:12:17 pm Unfortunately I can't advise that as we do not have access to that data anymore due
to the length of time since 10th October 2019 Defendant 02:15:20 pm :0( thats s as mist an abuse of process. Can you advise as to what correspondence was sent to me about this and when please. It’s important for me to know please. Thank you for your help Abuse of process* HX Car Park Management 02:22:01 pm If a vehicle does not contravene then the data is removed from the system after 3 months as it is not required. As you have confirmed you sold the vehicle in August 2019 and were no longer the keeper, even if we had access to the data on 10th October, due to data protection we would not be able to provide you this information. 3 letters were sent to the address we were provided by the DVLA on 16th October, 18th November and 13th December 2019, all with certificates of postage Defendant 02:22:57 pm thank you for the information you have provided. It has been helpful. Duration: 33m 9s Chat started on: https://hx-pcn.com/contact-us/ 3 Referrer: https://hx-pcn.com/ Visitor geolocation:
Exhibit ED/03
Chat transcriptName: Defendant E-mailWe would love to keep in touch with you, but under new General Data Protection Regulations, weneed you to ‘opt-in’ by ticking this box. AgreeHX Car Park Management Mon, 06/22/20 12:43:21 pm UTCHello. How may I help you? Defendant 12:43:45 pm Hello, I would like to confirm you have received an email I sent to you yesterday please. HX Car Park Management 12:44:20 pm Can you advise which email address you sent it to and I can check for you? Defendant 12:44:38 pm [email protected] do you have a seperate appeals /. complaint address also please or will my mail be handled by one of those departments ? HX Car Park Management 12:46:11 pm I've checked and this has been received and will be dealt with by the relevant department, we do not have a separate complaints email address and appeals are dealt with either online through our website or in the post Defendant 12:47:41 pm thankyou, I didnt receive the PCN only the court paperwork so wasn't afforded the ability to appeal (detailed in my email). In order to prepare for the court case (despite paying for my parking) can you please advise who I address subject Access request to in your organisation please, can this be done electronically or only by posted letter ? 2 HX Car Park Management 12:49:02 pm If you wish to make a right of access request under GDPR, you can email this to [email protected]. When you do, you will need to make sure that you provide the vehicle registration in your letter so the data protection team can locate all records for you. Defendant 12:50:05 pm okay great thank you, is there any chance my email could possibly be handled today please given the tight time scales. HX Car Park Management 12:51:03 pm Unfortunately I can't guarantee that, any right of access requests have to be dealt with within 1 month of the request being dealt with in full, however I will request this gets dealt with ASAP once received Defendant 12:51:34 pm Thanks, I meant the email sent lastnight which is not a SAR. HX Car Park Management 12:52:34 pm Sorry, I will request the team respond today. Defendant 12:53:09 pm ok thanks, that's really helpful, that's all, have a nice day and stay safe. HX Car Park Management 12:53:25 pm You're welcome, have a nice day Defendant archived the chat 12:53:57 pm Duration: 10m 36s Chat started on: https://hx-pcn.com/contact-us/ Referrer: https://www.google.com/ Visitor geolocation:
Re / Lead PCN / HX Car Park Management Limited -v-
County Court Claim (Northampton)
Many thanks for your email and attachments.
You may not be aware of the communications that were had with HX Car Park Management, under a subject access request they have disclosed that a payment was received from me on the day in question for the period in question, but for another vehicle registered on their system and associated with my account, that registration is
This registration is visible on your whitelist as entry number 111. Somehow there seems to have been a mixup with the payment that was made and the vehicle it was applied to.
I attach a copy of the live chat correspondence with the parking company representative, in which the associate from HX Car Parks acknowledges payment was for this vehicle. However, there can also be no doubt as the data you have sent over has not been redacted correctly and you have sent me a complete list of confidential data of all vehicles managed on that day. I may be incorrect but I fear this data breach may have significant implications under GDPR for your organisation and also your client HX Car Parks Management.
I feel given the information I have supplied (written communications, defence and attachments to this email), it clearly demonstrates a payment was made on the on the day in question and there are no grounds for the claim.
Should we proceed to court I will be providing exhibits which include, the response of the Subject Access request from HX Parking Management, I will also need to consider if I should include a full copy of the whitelist you have supplied as it clearly showing a payment was made but assigned to my old vehicle registration by the system instead of my new one registration, and of course the proof of payment made on the day in question by me to HX Car Park Management. I will also be relying on clause 19 of my defence for seeking significant costs against this claim.
Thus far I have spent many hours on this matter and am keeping a list of my costs, to date they are in excess of £400 and I will be exercising my right to ask the court to seek costs from you as per section 19 of my filed defence (copied below for your convenience)
19. (a) standard witness costs for attendance at Court, pursuant to CPR 27.14, and (b) that anyhearing is not vacated but continues as a costs hearing, in the event of a typical Notice ofDiscontinuance. The Defendant seeks a finding of unreasonable behaviour in the pre-andpost-action phases, by this Claimant. Pursuant to CPR 46.5, whilst indemnity costs cannotexceed two thirds of the applicable rate if using legal representation, the Defendant notesthat LiP costs are not necessarily capped at £19 ph. It is noted that a Defendant may ask intheir Summary Costs Assessment for the court to award their usual hourly rate for the manyhours spent on this case [ref: Spencer & anor v Paul Jones Financial Services Ltd].
I feel that at this stage it would make sense for your organisation and claimant to discontinue the claim and make a payment to me for £400 costs to date . I am happy to accept payment direct to my bank, that will see this matter closed and resolved and no further action taken on my part. Should you wish to make payment today please contact me on and I can provide you with the bank details for your organisation to make the good will payment and confirmation that the case has been discontinued.
Yours Sincerely
Defendant (Miss)
Exhibit ED/06 Communication from new car owner of confirming the car was not in Nottingham parked in the Marco Island car park on the 10th or 11th October 2019. This could be a text screen shot or email.
Exhibit ED/07
From: Ellie at Gladstones Solicitors <[email protected]> Date: 3 August 2020 at 14:52:34 BST To:Subject:
Dear
Thank you for your recent correspondence. Please note that our Data Protection Department are dealing with the issue you have raised, this email will simply relate to your alleged costs. As you will be aware, given that this matter will inevitably be a Small Claim due to its complexity and value, costs above the fixed amounts set by the court will only be awarded due to unreasonable behaviour. It is denied that our client has acted unreasonably. You failed to respond to our pre-litigation correspondence. Our client was unaware you disputed the debt until you filed your defence. Prior to this, as far as our client was aware, there was no payment for the vehicle you parked which is required under the contract. It was only upon receipt of the whitelist that you have ascertained that you made payment for your old VRN, this is not our client's error. The signs on the land state that you must enter your full and correct vehicle registration, you did not and thus accepted the charge. Your suggestion that your costs are 'in excess of £400.00' is rejected, furthermore, you have not explained how they are calculated. in this instance you are acting for yourself as a Litigant in Person and therefore can only claim up to £19.00 per hour pursuant to CPR 48.6. For the avoidance of doubt, our client is not making payment to you in the sum of £400.00. Kind regards
I believe that the facts stated in this witness statement are true. I understand thatproceedings for contempt of court may be brought against anyone who makes, or causes tobe made, a false statement in a document verified by a statement of truth without anhonest belief in its truth.
Signature............................
Date..................................
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Consumer Rights Ac/ 2015 (c. I 5) SCHEDULE 2 Consumer contract terms which may be regarded as unfair Document Generated: 2019-1022
Status: 771is is the original version (as ii was originally enacted).
3
contract of indeterminate duration without notice where there is a valid reason, if the supplier is required to infonn the consumer of the cancellation immediately.
22 Paragraph 11 (variation of contract without valid reason) does not include a term by which a supplier of financial services reserves the right to alter the rate of interest payable by or due to the consumer, or the amount of other charges for financial services without notice where there is a valid reason, if
(a) the supplier is required to infonn the consumer of the alteration at theearliest opportunity, and
(b) the consumer is free to dissolve the contract immediately.
Contracts which last indefinitely
23 Paragraphs 11 (variation of contract without valid reason), 12 (determination of characteristics of goods etc after consumer bound) and 14 ( determination of price after consumer bound) do not include a term under which a trader reserves the right to alter unilaterally the conditions of a contract of indeterminate duration if-
(a) the trader is required to inform the consumer with reasonable notice, and
(b) the consumer is free to dissolve the contract.
Sale of securities, foreign currency etc
24 Paragraphs 8 (cancellation without reasonable notice), 11 (variation of contract without valid reason), 14 (determination of price after consumer bound) and 15 (increase in price) do not apply to-
(a) transactions in transferable securities, financial instruments and otherproducts or services where the price is linked to fluctuations in a stockexchange quotation or index or a financial market rate that the trader doesnot control, and
(b) contracts for the purchase or sale of foreign currency, traveller's chequesor international money orders denominated in foreign currency.
Price index clauses
25 Paragraphs 14 ( determfoation of price after consumer bound) and 15 (increase in price) do not include a term which is a price-indexation clause (where otherwise lawful), if the method by which prices vary is explicitly described.
17
Page 1 of 9
IN THE COUNTY COURT
Claim No.
Between
HX Car Park Management LIMITED (Claimant)
- and -
(Defendant)
_____________________
DEFENCE _____________________
1. The Defendant denies that the Claimant is entitled to relief in the sum claimed, or at all.
The points below are within the scope of the Defendant’s own knowledge and honest belief.
Whilst parts of this defence may be familiar to the Claimant and/or their legal representatives,
it would not be right for a litigant-in-person to be criticised for using all relevant resources
available. It is noted in any case, that these Claimants use third party pre-written templates as
standard. This statement was prepared by the Defendant specifically for this matter and
unlike the Claimant’s case, it deals properly and individually with the facts, the alleged
contract, and the quantum. The contents of this defence represent hours of research by the
Defendant, in order to grasp some knowledge of alien concepts of law, codes of practice and
procedures relating to the specific area of Parking Charge Notices (‘private PCNs’).
2. In relation to parking on private land, it is settled law that for any penalty to escape being
struck out under the penalty rule, it must be set at a level which already includes recovery of
the costs of operating the scheme. However, this Claimant routinely claims (as in this case) a
global sum of £160 per alleged PCN. This figure is a penalty, far exceeding the charge in
the ParkingEye Ltd v Beavis [2015] UKSC 67 case and falling foul of the binding authority
in ParkingEye Ltd v Somerfield Stores [2012] EWCA Civ 1338. In the 2012 case, the Court
of Appeal held that £135 would be an unrecoverable penalty but a claim for the PCN itself
would not [ref: para 419]. Thereafter, ParkingEye quietly dropped their ‘PCN plus
indemnity costs’ double recovery business model and pursued £85 in the Beavis case, where
it was determined by the Supreme Court that a significant justification for that private PCN
was that it already included all operational costs [ref: paragraphs 98, 193 and 198].
Page 2 of 9
The Claim is tainted by an abuse of process and should not proceed to trial
3. It is an abuse of process for a Claimant to issue an inflated claim for a sum which it is not
entitled to recover. The above authorities could not be clearer. Parking firms must choose
between a ‘Beavis-level’ charge calculation or loss-based damages. A parking firm cannot
seek to plead their claim in both but this Claimant routinely does - and has done in this case.
4. Where it is clear as a matter of law at the outset that even if a Claimant were to succeed in
proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks,
a trial of the facts would be a waste of time and money, and the Defendant submits that it is
proper that this action should be taken out of court as soon as possible.
5. When considering the Claimant’s case to the extent that is necessary at allocation or local
directions stage, the court is invited to determine as a matter of law that the Claimant is not
entitled to the remedy sought. An exaggerated claim such as this will always constitute an
abuse of process that can be determined by a glance at the Particulars (before any facts and
evidence are even scrutinised) and by applying the court’s duty under s71 of the Consumer
Rights Act 2015 (‘the CRA’) at the earliest opportunity. For the avoidance of doubt and to
demonstrate that this claim is unfair from the outset, the official CMA Guidance on the CRA
clarifies under ‘Disproportionate financial sanctions’ and ‘Indemnities against risk’
‘‘Other kinds of penal provisions which may be unfair are clauses saying that the business
can:
claim all its costs and expenses, not just its net costs resulting directly from the breach;
claim both its costs and its loss of profit where this would lead to being compensated twice
over for the same loss; and
claim its legal costs on an ‘indemnity’ basis, that is all costs, not just costs reasonably
incurred. The words ‘indemnity’ and ‘indemnify’ are also objectionable as legal jargon – see
the section on transparency in part 2 of the guidance...’’ (p87 - 5.14.3);
‘‘Terms under which the trader must be ‘indemnified’ for costs which could arise through no
fault of the consumer are open to comparable objections, particularly where the business
could itself be at fault. The word ‘indemnify’ itself is legal jargon which, if understood at all
by a consumer, is liable to be taken as a threat to pass on legal and other costs incurred
without regard to reasonableness.’’ (p119 - 5.31.7).
Page 3 of 9
6. The Claimant’s claim is entirely tainted by their ‘forum-shopping’ business model which
relies on routine abuse of process and disregard for the protections in the CRA. The
Defendant avers that parking firm claims which add a duplicitous ‘costs’ sum to the private
PCN are easily identified to be unlawful from the outset, without any need for a hearing to
determine where the truth lies in terms of evidence. The Court is, therefore, invited to strike
out the claim ab initio as an abuse of process, using its case management powers pursuant to
CPR 3.4 and also give serious consideration to Practice Direction 3C, as to whether the level
of similar abusive (and thus, wholly without merit) claims cluttering up the courts may
provide grounds for issuing an Extended Civil Restraint Order to protect consumers in future
from this Claimant and to save the courts time and money.
7. The Claimant’s notices/demands vaguely allude to unidentified sums being claimed ‘on an
indemnity basis’. Such imprecise terms would be considered incapable of binding any person
reading them under common contract law, and would also be considered void pursuant to
Schedule 2 of the CRA. Claims pleaded on this basis by multiple parking firms have
routinely been struck out ab initio in various County Court areas. Recent examples include
multiple Orders from District Judge Fay Wright sitting at Skipton County Court, with similar
Orders seen in the public domain from Deputy District Judge Josephs sitting at Warwick
County Court, District Judge Taylor at the Isle of Wight and Deputy District Judge
Colquhoun sitting at Luton County court in March 2020. All were summarily struck out,
solely due to parking firms falsely adding £60 to inflate the claim.
8. This matter was recently determined by District Judge Grand, sitting at Southampton County
Court on 11 November 2019, where the Claimants sought to have multiple strike out Orders
set aside. The application was dismissed, and a copy of the Approved Judgment is appended
to this defence. No appeal was made in that case, where the learned Judge found that £160
parking claims represented an abuse of process that ‘tainted’ each case. It was not in the
public interest for courts to allow exaggerated claims to proceed and merely disallow the
added £60 at trial on a case-by-case basis. To continue to do so would restrict the proper
protections only to those relatively few consumers robust enough to reach hearing stage.
9. That hearing was attended by BW Legal’s barrister, acting for an AOS member of the British
Parking Association (‘the BPA’) but in February 2020, Skipton County Court refused a
similar application from a barrister for Excel Parking Services Ltd (members of the rival
Trade Body, the International Parking Community -‘the IPC’). Whilst these cases are not
precedents, it is only right that Defendants should use them and expect no less protection and
proactive sanctions against parking firms whose claims happen to fall to other courts.
Page 4 of 9
10. In this situation, it ought not to be left to hardy individuals to raise this issue time and again at
trial, yet other disputing consumers are being so intimidated by the threats in a barrage of debt
demands and the possibility of facing court, that they pay a legally unrecoverable sum to
make it go away. Such conduct has no proper function in the recovery of alleged consumer
debt. To use the words of HHJ Chambers QC [ref: Harrison v Link Financial Ltd [2011] EWHC
B3 (Mercantile) - https://www.bailii.org/ew/cases/EWHC/Mercantile/2011/B3 html ]:
‘‘Whatever the strength of the suggestion that the courts should only be a last resort, there can be no
excuse for conduct of which the sole purpose must have been to make [...] life so difficult that they
would come to heel. In a society that is otherwise so sensitive of a consumer's position, this is surely
conduct that should not be countenanced’’
11. The quantum claimed is unconscionable and the falsely added sum not there at all (or was
buried in small print) on the sparsely-placed car park signs. As such, the Defendant avers that
the charge offends against Schedule 2 of the CRA, where s71(2) creates a duty on the Court
to consider the fairness of a consumer contract. The court’s attention is drawn (but not
limited to) parts 6, 10, 14 and 18 of the list of terms that are likely to be unfair and the CMA
Guidance linked earlier, and the Defendant invites the court to find this Claimant in breach.
12. Even if the Claimant had shown the global sum claimed in the largest font on clear and
prominent signs - which is denied - they are attempting double recovery of costs. The sum
also exceeds the maximum amount which can be recovered from a registered keeper as
prescribed in Schedule 4, Section 4(5) of the Protection of Freedoms Act 2012 (‘the POFA’).
It is worth noting that in the Beavis case, even though the driver was known, the Supreme
Court considered and referred more than once to the POFA because it was only right that the
intentions of Parliament regarding private PCNs were considered.
The part played by the (non-regulatory) two conflicting Accredited Trade Associations
13. Should this claim continue, the Claimant will no doubt try to mislead the court by pointing to
their Trade Association ‘ATA’ Code of Practice (‘CoP’) that now includes a clause 'allowing'
added costs/damages. The CoP is a self-serving document, written in the parking firms’
interests. Further, the ‘admin fee’ model was reportedly the proud invention of a member of
the BPA Board, Gary Osner, owner of ZZPS and whose previous firm, Roxburghe (UK)
Limited, folded after being declared ‘unfit’ by the Office of Fair Trading who refused to
renew their consumer credit licence due to ‘unfair and misleading’ business practices.
Page 5 of 9
14. The BPA’s Mr Osner states in an article in the public domain since 2018:
https://parkmaven.com/news/gary-osner-zzps-interview ''I created the model of ‘admin fees’ for debt
recovery because ticket value was so low that nobody would make any money. Parking is business and
business is about money, after all.'' The Defendant avers that it is clear that the competing ‘race
to the bottom’ ATAs are sanctioning double recovery and both the BPA and the
IPC/Gladstones (who had shared Directors) have engineered a veil of legitimacy to protect
this industry for years. The ATAs operate more like a cartel, not ‘regulators’ and the
conflicting CoPs have failed consumers so badly that the Secretary of State is overseeing a
new regulatory Code, following the enactment of the Parking (Code of Practice) Act 2019.
In contrast to the BPA Board member’s mindset, the will of Parliament as set out in the new
2019 Act is very much consumer-focussed, aiming for: ''good practice...in the operation or
management of private parking facilities as appears to the Secretary of State to be desirable having
regard to the interests of persons using such facilities.''
Pre-action protocol breach and nonsensical Particulars of Claim
15. In the alternative, the defence is prejudiced and the court is invited to note that, contrary to the
Pre-Action Protocol for Debt Claims, the Letter Before Claim omitted evidence of any breach
and failed to append the wording of the sign or consumer notice. Further, the stylised
Particulars of Claim are embarrassing and incoherent, lacking specificity re the status of the
contracting parties and failing to detail any contract, conduct or liability that could give rise to
a cause of action. There is insufficient detail to ascertain the nature, basis and facts of the
claim and even the exaggerated quantum has fluctuated, changing with each debt demand
and/or letter of claim over the preceding months.
The facts - lack of prominently displayed contract and no agreement on the charge
16. Should this poorly pleaded claim not be summarily struck out for any/all of the reasons stated
above, it is the Defendant’s position that no contract was entered into with the Claimant,
whether express, implied, or by conduct. Therefore, as a matter of contract as well as
consumer law, the Defendant cannot be held liable to the Claimant for any charge or damages
arising from any alleged breach of the purported terms. Whilst there is a lack of evidence
from the Claimant, the Defendant sets out this defence as clearly as possible in the
circumstances, insofar as the facts below are known.
Page 6 of 9
17. The defendant attempted to pay for parking using the telephone facility as indicated on the
signs in the carpark and has historically done so successfully in the same carpark named in
the particulars of the claim. The defendant experienced technical difficulties in attempting
to make the payment and tried several times. A fellow driver was also experiencing difficulty
also. Eventually it seemed that a payment was taken successfully, and the defendant has
evidence of the payment but the Claimant knows that payment was made, so this is not in
dispute.
18. The defendant has not received any parking charge documentation and her attention
regarding the alleged breach of contract was upon receipt of court papers. As a result the
defendant has not been afforded the right to appeal the ticket. The defendant contacted
both the acting solicitors and claimant on receipt of court papers but was told it is too late to
appeal the process as the court process has been started. The defendant has written to both
the acting solicitors and claimant directly asking that they discontinue the claim advising that
payment was made and providing proof that the payment was made, no response has been
received from either party.
19. The Claimant’s signs have vague/hidden terms and a mix of small font, such that they would
be considered incapable of binding any person reading them under common contract law, and
would also be considered void pursuant to Schedule 2 of the CRA. Consequently, it is the
Defendant’s position that no contract to pay an onerous penalty was agreed by the driver.
The ParkingEye Ltd v Beavis [2015] UKSC 67 case is distinguished
20. Unlike in this case, ParkingEye demonstrated a commercial justification for their £85 private
PCN, which included all operational costs, and they were able to overcome the real possibility
of the charge being struck out as punitive and unrecoverable. However, their Lordships were
very clear that ‘the penalty rule is plainly engaged’ in such cases. Their decision was specific
to that ‘unique’ set of facts: the legitimate interest argued, the car park location, and the ‘brief
and clear’ signs with the parking charge itself in bold and the largest text. The unintended
consequence is that, rather than persuade courts considering other cases that all private PCNs
are automatically justified, the Beavis case facts and pleadings (and in particular, the brief and
prominent signs) set a high bar that this Claimant has failed to reach.
Page 7 of 9
21. Due to the authority set by their earlier Somerfield case - mentioned at the start of this defence
- it is worth noting that ParkingEye no longer add ‘debt letter costs/damages’ to their private
PCNs and their own claims have escaped any reports of being summarily struck out for abuse
of process. This Claimant has failed to plead their case or to set out their terms or construct
their charges in the same way as in Beavis and the penalty rule remains firmly engaged.
22. Without the Beavis case to prop it up, and no alternative calculation of loss/damage, this
claim must fail. Paraphrasing from the Supreme Court, deterrence is likely to be penal if
there is a lack of an overriding legitimate interest in performance extending beyond the
prospect of compensation flowing directly from the alleged breach. The intention cannot be
to punish a motorist - nor to present them with concealed pitfalls, traps, hidden terms or
unfair/unexpected obligations - and nor can the operator claim an unconscionable sum.
23. Further, in its conduct and signage, this Claimant has failed to comply with the CoP that they
are signed up for, such as it is. Under the Consumer Protection from Unfair Trading
Regulations, it is an unfair/misleading business practice to state that a Trader complies with a
Code of Practice, but in reality, does not. This Claimant’s conduct is also significantly
different from the Beavis case [para 111.] where even the Supreme Court were wrongly
convinced that the CoP was some sort of regulatory framework:
“And, while the Code of Practice is not a contractual document, it is in practice binding on the
operator since its existence and observance is a condition of his ability to obtain details of the
registered keeper from the DVLA. In assessing the fairness of a term, it cannot be right to ignore the
regulatory framework which determines how and in what circumstances it may be enforced.’’
24. A more relevant list of binding Court of Appeal authorities which are on all fours with a case
involving unclear terms and a lack of ‘adequate notice’ of an onerous parking charge, would
include:
(i) Spurling v Bradshaw [1956] 1 WLR 461 and
(ii) Thornton v Shoe Lane Parking Ltd [1970] EWCA Civ 2,
both leading examples of the ‘red hand’ rule, that an unseen/hidden clause cannot be
incorporated after a contract has been concluded; and
(iii) Vine v London Borough of Waltham Forest: CA 5 Apr 2000, where the Court of
Appeal held that it was unsurprising that the appellant did not see the sign ''in view of
the absence of any notice on the wall opposite the southern parking space''. In other
cases where parking firm Claimants and/or their legal teams have cited Vine in their
template witness statements, they have misled courts by quoting out of context from
Page 8 of 9
Roch LJ, whose words related to the Respondent’s losing case, and not from the
decision. In fact, Miss Vine won because it was held as a fact that she was not
afforded a fair opportunity to learn of the terms by which she would be bound.
25. The Claimant is also put to strict proof, by means of contemporaneous and unredacted
evidence of a chain of authority flowing from the Landowner or Lessor of the relevant land to
the Claimant. It is not accepted that the Claimant has adhered to the landholder's definitions,
exemptions, grace period, hours of operation, etc. and any instructions to cancel charges due
to complaints. There is no evidence that the freeholder authorises this particular Claimant
(Companies House lists their company number as 09313114) to issue private PCNs or
what the land enforcement boundary and start/expiry dates are/were, and whether this
Claimant has standing to enforce such charges by means of civil litigation in their own name
rather than a bare licence to issue PCNs ‘on behalf of’ the landowner on an agency basis.
In the matter of costs; if this claim is not struck out, the Defendant seeks:
26. (a) standard witness costs for attendance at Court, pursuant to CPR 27.14, and (b) that any
hearing is not vacated but continues as a costs hearing, in the event of a typical Notice of
Discontinuance. The Defendant seeks a finding of unreasonable behaviour in the pre-and
post-action phases, by this Claimant. Pursuant to CPR 46.5, whilst indemnity costs cannot
exceed two thirds of the applicable rate if using legal representation, the Defendant notes that
LiP costs are not necessarily capped at £19 ph. It is noted that a Defendant may ask in their
Summary Costs Assessment for the court to award their usual hourly rate for the many hours
spent on this case [ref: Spencer & anor v Paul Jones Financial Services Ltd].
27. In summary, the Claimant's Particulars disclose no legal basis for the sum claimed and the
abuse of process taints this Claim. The Claimant knew, or should have known, that an
exaggerated claim where the alleged ‘debt’ exceeds £100 (ATA Code of Practice ceiling for a
private PCN) is disallowed under the CPRs, the Beavis case, the POFA and the CRA. The
Defendant invites the court to find that this exaggerated claim is entirely without merit, and to
bring an end to the case without a hearing.
Statement of Truth
I believe that the facts stated in this defence are true. I understand that proceedings for contempt of
court may be brought against anyone who makes, or causes to be made, a false statement in a
document verified by a statement of truth without an honest belief in its truth.
Page 9 of 9
Defendant’s signature:
Defendant’s name
Date: 30th
June 2020
Approved Judgment from Southampton Court is appended as annex 1 to show why claims such as
this are being summarily struck out.
If this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity (Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person This Transcript is Crown Copyright. It may not be reproduced in whole or in part other than in accordance with relevant licence or with the express consent of the Authority. All rights are reserved
IN THE SOUTHAMPTON COUNTY COURT
No. F0DP806M F0DP201T
Courts of Justice London Road, Southampton
Monday, 11 November 2019
Before:
DISTRICT JUDGE GRAND
B E T W E E N : BRITANNIA PARKING GROUP LTD Claimant
- and -
(1) Defendants
(2) CHRIS CROSBY
_________ MR H. MAINWARING (instructed by Messrs BW Law) appeared on behalf of the Claimant. The First Defendant appeared in person. MRS REEVES appeared on behalf of the Second Defendant.
[Transcript produced from poor quality audio recording – one channel working out of two]
__________
J U D G M E N T
OPUS 2 DIGITAL TRANSCRIPTION 1
OPUS 2 DIGITAL TRANSCRIPTION 2
THE DISTRICT JUDGE:
1 I have two applications before me in two sets of proceedings although the applications are essentially the same. Both sets of proceedings were before District Judge Taylor in May of this year. They are both claims by Britannia Parking Group Ltd trading as Britannia Parking, one against Mr Chris Crosby and the other against Mr. Both relate to parking penalty charge notices issued against the respective defendants and both include in the claim a claim that is expressed in the claim form as a claim for £60 additional expenses pursuant to PCN terms and conditions.
2 In response to both matters a defence has been put in – the defences are not identical – and the matter came before District Judge Taylor in box work for consideration with directions questionnaires, the matters having been transferred out of the money claims centre. In both matters he struck out the claims as an abuse of process, the reasons given being that the claimant claims a substantial charge additional to the parking charge, which it is alleged the defendants failed to pay; and that the additional charge is not recoverable under the Protection of Freedoms Act 2012 Schedule 4 nor with reference to the judgment in Parking Eye v Beavis ; and that it is an abuse of process for the claimant to issue a knowingly inflated claim for an additional sum which it is not entitled to recover.
3 Of course it also contained a notice pursuant to rule 3.3 that either party has the right to apply and that is exactly what the claimant has done in both cases. They have applied for District Judge Taylor’s order to be set aside and for directions to be given. In support of that, I have the statement of Colin Brown and a second statement from Colin Brown and I have had skeleton arguments today from Mr Mainwaring, counsel who appears on behalf of the claimant, and Mrs Reeves who is the lay representative for Mr Crosby.
4 I have heard submissions from Mr Mainwaring, Mrs Reeves, and also very briefly from Mr. who takes a very different position from Mr Crosby. I think it is probably fair to describe him today as almost a spectator in that he raised a defence under the Bills of Exchange Act but does not contest the parking charge and does not really resist the claimant’s application.
5 What I should also mention is that when the claimant submitted its application, it requested that it be placed in front of a circuit judge. His Honour Judge Hughes QC is the designated civil judge for this area. He directed that the matter be listed with a time estimate of 30 minutes before a full time district judge which is what it has been, although it has overrun its time estimate. The skeleton arguments, with which I have been provided, can only be described as very full.
6 All these parking cases now operate under the shadow of the Supreme Court decision of Parking Eye v Beavis. Prior to the Supreme Court’s decision in Parking Eye v Beavis there was litigation going on up and down the country around all sorts of issues which were raised by defendants but resisted by parking companies. The bringing of the case before the Supreme Court --- maybe I should not say it was intended to provide a definitive answer to the issues being raised, but certainly it was the hope that the decisions which were being made by the courts up and down the country would become very much simpler as a result of the matter going to the highest court in the land and that court giving a judgment. The charge in that case (Beavis) was £85. One may say it was disproportionate for such a case to go to the Supreme Court but the volume of cases and the amounts of money involved overall, led to that happening. Those challenging parking charges were to be disappointed
OPUS 2 DIGITAL TRANSCRIPTION 3
by the decision of the Supreme Court which essentially decided that the parking charges were not a penalty. They did that after careful consideration, and a lengthy case report of the judgments given was released.
7 So it is against that background that we have this case before us. What the Supreme Court decided was that the charge of £85 as a parking charge was reasonable and acceptable, lawful, legitimate and entirely defensible and appropriate within the scheme of the regime of parking charges.
8 The reason District Judge Taylor gave for striking out the claim in this case is that there is an additional substantial charge which the claimant in this case is seeking to make. He is criticised for giving very brief reasons for the strike out but in fact his reasons are substantially longer than the original particulars of claim which set out the additional parking charge of £60.
9 It seems to me that there are two issues here; first of all, whether it is appropriate for the additional charge to be struck out and then, secondly, whether the striking out should take with it the whole of the claim or whether the court should strike out the £60 charge and leave outstanding the £100 charge which is within the bounds of what the Supreme Court considered reasonable in Parking Eye v Beavis.
10 Mr Mainwaring on behalf of the claimant says that this is more a matter for evidence or substantial consideration at trial whereas Mrs Reeves on behalf of Mr Crosby cites a number of paragraphs from the Beavis judgment, suggesting that the Supreme Court decided that the charge of £85 for overstaying in a car park was reasonable but higher charges were not to be.
11 It is difficult to do justice to absolutely everything which has been put before me in the skeleton arguments and the submissions today but I will deal with them, I hope, as clearly and as briefly as I can.
12 Reference is made by the Claimant to the guidance provided by the British Parking Association (and the British Parking Association code of practice was referred to in the Supreme Court decision of Parking Eye v Beavis). That judgment also refers to the statutory instrument which sets out what local authorities may charge by way of parking charges. It does seem to me that the Supreme Court gives a somewhat uncritical consideration of the BPA Code of Practice, in that the BPA is an association of parking companies. The guidance is produced by parking companies for parking companies largely for their own benefit. They refer to the fact that there is only one such association. So when the claimant asks me to look at the BPA Code of Practice, which says that a £60 charge is a reasonable charge to make, I treat it with massive scepticism because it seems to me that it is entirely self-serving for the British Parking Association to give guidance to parking companies of what are appropriate additional charges. I have much greater respect as I should to the Supreme Court decision about what is reasonable.
13 I was taken by Mrs Reeves in her submissions to para.98 of Beavis where it is explained why the £85 charge is reasonable. It says that it has two main objectives; one is to manage the efficient use of parking spaces and this was to be achieved by deterring commuters or other long-stay motorists from occupying parking spaces for long periods. The other purpose was to provide an income stream to enable Parking Eye to meet the costs of operating the scheme and make a profit from its services. The judgment goes on at para.193 to say that the scheme also covered Parking Eye’s costs of operation and gave their shareholders a healthy annual profit.
OPUS 2 DIGITAL TRANSCRIPTION 4
14 And again at para.198:
“The charge has to be and is set at a level which enables the managers to recover the costs of operating the scheme. It is here also set at a level enabling Parking Eye to make a profit.
15 It seems to me absolutely clear from the Supreme Court judgment that what they were
determining was what a reasonable charge was in the context of running these parking schemes. Some people will stay within the rules and will pay nothing or pay a small charge. Others will overstay and will pay much larger charges which the Supreme Court has found to be a proportionate and reasonable penalty. The Supreme Court considered a charge of £85 and determined that that is not an unacceptable charge.
16 What we have here is essentially a charge of £160 for parking although the advertised figure for the charge on the signage is £100. The £60 is based on the vague additional sentence on the sign saying that there may be other charges. The particulars of claim then refer to this almost as an afterthought in that it comes as the last line after reference to the claim for interest. The claim form says it is £60 for contractual costs pursuant to the PCN and the terms and conditions. It seems to me that that the £60 charge is quite transparently an attempt to gild the lily, to garnish the margin of what is provided in the Supreme Court decision of Beavis as to what is a reasonable charge in the circumstances and, to use District Judge Taylor’s words, it is an inflated charge.
17 It has been suggested to me by Mr Mainwaring that somehow it is an additional charge for additional expenses which are caused by people who do not pay. The Supreme Court was concerned with a case of somebody who did not pay. This was the whole nub of what the case was about and it does not seem to me that it is appropriate for the parking companies, having won in the case of Beavis decided by the Supreme Court for the reasons given then to try to add on an additional charge.
18 It seems to me that it is absolutely clear from the Supreme Court decision that the intention was not for parking schemes to make charges for overstayers that amount to £160 or for there be one charge and then another substantial charge. Therefore what the claimant is seeking to do in this case is to charge far more to somebody who does not comply with the parking terms than was approved by the Supreme Court in Beavis. It does seem to me that the additional sum charged is unlawful.
19 I should mention that Mrs Reeves has raised before me the Consumer Rights Act and the court’s responsibility under s71 to consider potentially unfair terms even if the issue is not raised by any of the parties. Mrs Reeves sought to take me to the Act and she has identified to me the three examples in schedule to the Act which she says makes this additional charge unfair. It is Schedule 2 to the Act which gives the examples of terms which may be regarded as unfair. Mrs Reeves refers to examples 6, 10 and 14. I have to say that it seems to me that Mrs Reeves is right to refer to them and even if I had not been with her on the question of the parking fine it does seem to me that these charges are unfair terms in that they fit the three examples of unfair terms.. The reference on the signs to charges seems to me simply to leave entirely to the discretion of the parking company what additional charges they may levy and is completely against the intention of the Consumer Rights Act legislation and the question of what terms are fair.
20 Example term 14 says:
OPUS 2 DIGITAL TRANSCRIPTION 5
“A term which has the object or effect of giving the trader the discretion to decide the price payable under the contract after the consumer has become bound by it, where no price or method of determining the price is agreed when the consumer becomes bound.”
21 That is bang on. It does not say that there will be an additional charge of £60. It just
vaguely refers to further charges.
22 I further say that the charge of £60 on a parking charge of £100 is 60 per cent which is disproportionate. So, I find that the charge falls foul of the decision of Beavis, it falls foul of the unfair contract terms provisions of the Consumer Rights Act and it is quite clearly not a lawful charge.
23 It follows from that that I must come to consider whether striking out the whole claim is appropriate. The inclusion of the additional £60 charge is an attempt to go beyond the decision in Parking Eye v Beavis about what is reasonable and so not a penalty. The whole claim is tainted by it. Even if one treats it as separate from the parking charge, the claimant should have well known that it is not a charge which is lawful. The very fact that they bring a claim in these circumstances, it seems to me is an abuse of the process of the court. In saying that, I observe that with any claim which is put before the court, if a party does not put in a defence to the claim, then it is open to the claimant to enter a default judgment. I have no information about the numbers but I do not doubt that many default judgments are entered in cases containing these additional charges and the claimant then has the benefit of those judgments, including, as they do, additional charges which I have found to be unlawful. That reinforces why it is abusive to include unlawful additional charges in these claims.
24 So I conclude by saying that I dismiss the application to set aside District Judge Taylor’s order.
__________
OPUS 2 DIGITAL TRANSCRIPTION 6
CERTIFICATE
Opus 2 International Limited hereby certifies that the above is an accurate and
Bingham LJ at pp 445-446 and, more directly, the American Law Institute’s
“Restatement of the Law, Second, Contracts” section 356 on liquidated damages
and penalties, in which the commentary suggests that the court’s focus on the
substance of the contractual term would enable it in an appropriate case to identify
disguised penalties.
259. It may also be said against the rule that it promotes uncertainty in commercial
dealings as the contracting parties may not be able to foresee the judges’ value
judgment on whether a particular provision is exorbitant or unconscionable. There
is beyond doubt real benefit in parties being able to agree the consequences of a
breach of contract, particularly where there would be difficulty in ascertaining the
sum in damages which was appropriate to compensate the innocent party for loss
caused by the breach. Parties save on transaction costs where they can avoid
expensive litigation on the consequences of breach of contract. It has also been said
that judges should be modest in their assumptions that they know about business:
Wallis v Smith (1882) 21 Ch D 243, Jessel MR at p 266.
260. Legislative measures have been introduced to control unfair terms in
contracts. In recent years, the Unfair Terms in Consumer Contracts Regulations
1999 and the Consumer Protection from Unfair Trading Regulations 2008 have
given effect to European Directives and more recently the Consumer Rights Act
2015 has been brought into force. But while this legislation may have reduced the
need for the rule against penalties in consumer contracts, it has no bearing on
commercial contracts.
261. There are therefore arguments that can be made against the rule against
penalties, or at least against its scope. But I am persuaded that the rule against
penalties should remain part of our law, principally for three reasons.
Page 111
262. First, there remain significant imbalances in negotiating power in the
commercial world. Small businesses often contract with large commercial entities
and have little say as to the terms of their contracts. Examples such as the
relationship between a main contractor and a sub-contractor in the construction
industry and that between a large retail chain and a small supplier spring to mind.
263. Secondly, abolition of the rule against penalties would go against the flow of
legal developments both nationally and internationally. Both the Law Commission
of England and Wales and the Scottish Law Commission have looked at the rule
against penalties and neither has recommended its abolition. The Law
Commission’s Working Paper No 61 on “Penalty Clauses and Forfeiture of Monies
Paid” in 1975 proposed the extension of judicial control to embrace penalty clauses
that come into operation without any breach of contract. More recently, the Scottish
Law Commission’s “Report on Penalty Clauses” in 1999 recommended the
retention of judicial control over penalties whether they took the form of a payment
of money, a forfeiture of money, a transfer of property or a forfeiture of property. It
recommended a criterion of “manifestly excessive” and the abolition of any
requirement that the clause be founded in a pre-estimate of damages. It also
recommended that judicial control should not be confined to cases where the
promisor is in breach of contract.
264. As counsel’s very helpful researches showed, other common law countries
such as Australia, Canada, New Zealand, Singapore and Hong Kong have rules
against penalties, as has the commercially important law of New York, the Uniform
Commercial Code and, as I have mentioned, the American Law Institute’s
“Restatement of the Law, Second, Contracts”.
265. In the civil law tradition, which has had a profound influence on Scots law
and which under Lord Mansfield influenced the development of English commercial
law, the modern civil codes of Belgium (article 1231), France (article 1152),
Germany (section 343), and Italy (article 1384) and the Swiss Code of Obligations
(article 163) all provide for the modification of contractual penalties using tests such
as “manifestly excessive”, “disproportionately high”, or “excessive”. Further, in
what Mr Bloch described as “soft law”, recent international instruments prepared by
expert lawyers, such as the Council of Europe’s Resolution (78) 3 on Penal Clauses
in Civil Law (1978) (article 7), the Principles of European Contract Law (1995)
(article 9.509), the Unidroit Principles of International Commercial Contracts
(1994) (article 7.4.13) and Uncitral texts on liquidated damages and penalty clauses
(1983) (article 8) also provide for the restriction of “grossly excessive” or
“manifestly excessive” or “substantially disproportionate” penalty clauses. The
Draft Common Frame of Reference (III – 3:712) also provides for the reduction of
stipulated payments for non-performance if they are “grossly excessive”.
Page 112
266. Thirdly, I am not persuaded that the rule against penalties prevents parties
from reaching sensible arrangements to fix the consequences of a breach of contract
and thus avoid expensive disputes. The criterion of exorbitance or
unconscionableness should prevent the enforcement of only egregious contractual
provisions.
267. Ms Smith’s alternative proposal, that the rule should not extend to
commercial transactions in which the parties are of equal bargaining power and each
acts on skilled legal advice, does not appeal to me. Creating such a gateway to the
application of the rule would risk adding to the expense of commercial disputes by
requiring the court to rule on issues of fact about the bargaining power of the parties
and the calibre of their respective legal advisers.
268. I therefore turn to the application of the rule against penalties in the two
appeals.
The application of the rule against penalties:
(a) in the Cavendish appeal
269. Clause 5.1, which removes a seller’s valuable rights to receive the interim
payment and final payment if he is in breach of clause 11.2, was likely to deprive
the defaulting shareholder of a substantial sum of money. The parties have agreed
that the enforcement of the clause would deprive Mr El Makdessi of up to
$44,181,600. Breach of clause 11.2 therefore comes at a high price.
270. There is clearly a strong argument, which Lord Neuberger and Lord
Sumption favour, that in substance clause 5.1 is a primary obligation which made
payment of the interim and final payments conditional upon the seller’s performance
of his clause 11.2 obligations. But even if it were correct to analyse clause 5.1 as a
secondary provision operating on breach of the seller’s primary obligation, I am
satisfied that it is not an unenforceable penalty clause for the following six reasons.
271. First, it is important to consider the nature of the obligations of the sellers
which could trigger the withholding of the instalments under clause 5.1. Clause 11.2
imposed restrictive covenants on the sellers, prohibiting them from competing with
the company. Having sold substantial blocks of shares in the company for a price
which attributed a high value to its goodwill, the sellers were prohibited from
derogating from what they had sold.
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272. Secondly, the factual matrix in the uncontested evidence of Mr Andrew Scott,
WPP’s director of corporate development, and Mr Ghossoub and recorded in the
agreed statement of facts and issues showed the importance of personal relationships
in the marketing sector and particularly in the Middle East. The statement of facts
and issues recorded (at para 5) that the success of the Group’s business depended on
the personal relationships which Mr Ghossoub and Mr El Makdessi had built up
with their key clients and in para 33, which Lord Neuberger and Lord Sumption
quote at para 66 of their judgment, it explained that the agreement was structured to
protect the goodwill of the Group. The continued loyalty of the sellers was critically
important to preserving the value of the Group’s goodwill.
273. Thirdly, that evidence and the agreement itself showed that a large proportion
of the agreed purchase price was attributable to that goodwill. Extrapolating from
the maximum consideration which the sellers could have received for the shares
which they sold, the company had a maximum value of $300m which compares with
its certified NAV (without goodwill) of $69.7m.
274. Cavendish therefore needed to be assured of the sellers’ loyalty. It had a very
substantial and legitimate interest in protecting the value of the company’s goodwill.
It did so by giving the sellers a strong financial incentive to remain loyal to the
company by complying with the restrictions set out in clause 11.2. The sellers, who,
like Cavendish, had access to expert legal advice and negotiated the contract over
several months, agreed to peril their entitlement to the deferred consideration on
their continued loyalty.
275. Fourthly, I am not persuaded by Mr Bloch’s argument that clause 5.1 was
exorbitant because it could be triggered by a minor breach of clause 11.2, such as an
unsuccessful solicitation of a senior employee. That appears to me to be unrealistic.
Clause 5.1 was not addressing the loss which Cavendish might suffer from breach
of the restrictive covenant, whether an isolated and minor breach or repeated and
fundamental breaches. It was addressing the disloyalty of a seller who was prepared
in any way to attack the company’s goodwill. No question therefore arises of a
presumption of a penalty where the same sum is payable on the occurrence of several
events which may cause serious or trifling damages as in Lord Dunedin’s
proposition 4(c) in Dunlop. In any event, that presumption would not apply because
the losses arising from any breach of clause 11.2 were generically the same – see
Lord Parker of Waddington in Dunlop at p 98. As Lord Neuberger and Lord
Sumption have said (para 75), loyalty is indivisible.
276. Fifthly, Mr Bloch submitted that clause 5.1 might operate perversely as far
as Mr El Makdessi was concerned because a minor breach of clause 11.2, which did
not harm the company’s goodwill, would result in his losing more by the loss of the
interim and final payments than a major breach which diminished the profits of the
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company and thus the deferred consideration. Similarly, he submitted that a breach
that was detected before the interim payment or the final payment would have more
serious consequences for the seller than one detected later. But again clause 5.1 is
not addressing the loss which Cavendish may incur from a particular breach. The
relevant questions are broader, namely (i) whether Cavendish had a legitimate
interest in the circumstances to protect its investment in the company and (ii)
whether the making of its later instalments of price depend upon each seller’s
performance of his clause 11.2 obligations was a manifestly excessive means of
protecting that interest.
277. Finally, I am not persuaded that the company’s entitlement to seek a
disgorgement of Mr El Makdessi’s profits arising from his breach of fiduciary duty
and the possibility that Cavendish itself might have a claim in damages if Mr El
Makdessi breached clause 11.2 after he ceased to be a director make the operation
of clause 5.1 exorbitant or unconscionable. The former is res inter alios acta as each
of Cavendish and the company have separate legal personality. Any award of
damages to Cavendish would be designed to place it in the same position financially
as if the contract had been performed. If an award of damages together with the price
reduction which clause 5.1 effects involved double counting, I would expect the
price reduction to be credited against the claim for damages.
278. In summary, I am persuaded that in the circumstances of this share purchase,
Cavendish had a very substantial legitimate interest to protect by making the
deferred consideration depend upon the continued loyalty of the sellers through their
compliance with the prohibitions in clause 11.2. I do not construe clause 5.1 as a
stipulation for punishment for breach; it is neither exorbitant nor unconscionable but
is commensurate with Cavendish’s legitimate interests. It may therefore be enforced.
279. Clause 5.6, which provides for the compulsory transfer of the defaulting
shareholder’s retained shareholding, is more difficult. But I have come to the view
that it also may be enforced. Mr El Makdessi does not contest the obligation placed
on the defaulting shareholder to transfer his shares on breach of contract. But he
challenges the price at which the compulsory transfer is to be effected, as the formula
for the calculation of the price excludes the value of goodwill.
280. There is again a strong argument, which Lord Neuberger and Lord Sumption
favour, that clause 5.6 is a primary obligation to which the rule against penalties
does not apply. But if all such clauses were treated as primary obligations, there
would be considerable scope for abuse. I construe the clause as a secondary
obligation, which is designed to deter (a) the sellers from breaching their clause 11.2
obligations and (b) a seller who is an employee from misconduct which damages
the interests of the Group and leads to summary dismissal (viz the Schedule 12
definition of “defaulting shareholder”).
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281. Clause 5.6, like clause 5.1, is not a provision which fixes the damages payable
for a breach of contract. It seeks to regulate the terms on which a defaulting
shareholder severs his connection with the company. It falls to be construed in the
context of the agreement as a whole, in which Cavendish agreed to pay a price for
the shares which it purchased on the basis that the sellers remained involved in the
company for transitional periods and complied with their clause 11.2 duties for at
least two years after they had exercised their put options under clause 15 or had
otherwise ceased to hold shares in the company. I think that Mr El Makdessi was
correct in accepting that, if a seller acted in breach of clause 11.2 by competing with
the company in any of the ways listed in that clause, Cavendish would act reasonably
in seeking to remove him from any involvement in the company, including by the
compulsory transfer of his shareholding. On the departure of the defaulting
shareholder, the company would lose both his work on its behalf and also his
valuable personal connections. It was readily foreseeable at the time of contracting
that the departure on default of either of the sellers would cause significant damage
to the company’s goodwill and thus materially reduce its value.
282. Against that background, the question for the court is whether the defaulting
shareholder option price, which was the net asset value of the company excluding
any goodwill value, was an exorbitant or unconscionable undervaluation when
measured against Cavendish’s legitimate interest in protecting its investment from
the risk of either of the sellers acting against the company’s interests. In my view,
the terms were harsh; but they were not exorbitant. They were not a punishment but,
in the particular context of the purchase of a marketing business in the Middle East,
were a legitimate means of encouraging the sellers to comply with their clause 11.2
obligations which were critical to Cavendish’s investment. Nor were the terms
unconscionable for any broader reason. The contract was negotiated in detail by
parties of relatively equal bargaining power and with skilled legal advice; a seller
could readily comply with the obligations in clause 11.2, which were, in Lord
Neaves’s words in Forrest & Barr (para 249 above), obligations in non faciendo, or
prohibitions.
283. For completeness, I comment on Mr Bloch’s suggestion that the court has a
power to modify the terms on which clause 5.6 would operate. In English law a
penalty clause cannot be enforced. For the reasons given by Lord Neuberger and
Lord Sumption in their judgment (at paras 84-87) I think that the decision of the
Court of Appeal in Jobson v Johnston was incorrect in so far as it modified a penalty
clause and should be overruled. In Scots law the statutory power of the court to
modify a penalty (para 252 above) does not extend to a penalty in support of a
primary obligation other than for payment of a sum of money. If there is in Scots
law a residual common law power of modification of penalties in support of primary
obligations such as to supply goods or services as in Craig v McBeath (above), I do
not see how the power of abatement can extend to modifying the price of a
compulsorily transferred asset.
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(b) in Mr Beavis’s appeal
284. I agree (a) that the relationship between ParkingEye and Mr Beavis was a
contractual relationship in the form of a licence and (b) that the parking charge
incurred on breach of the obligation to park for no more than two hours engages the
rule against penalties. If my analysis of the rule against penalties is correct, the only
relevant questions are (i) did ParkingEye have a legitimate interest to protect by the
imposition of the parking charge (ii) whether the level of the charge is exorbitant or
unconscionable.
285. This is because, first, the charge was not and did not purport to be a claim for
damages for any loss that ParkingEye would suffer as a result of a motorist
exceeding the two-hour maximum parking time. ParkingEye suffered no loss.
Secondly, the fact that the charge encouraged the motorist to comply with the terms
of the licence and deterred him or her from overstaying or parking irresponsibly
outside the marked parking bays did not make it a penalty. Deterrence in that sense
is not the test for a penalty.
286. ParkingEye had a legitimate interest to protect. It provided a service to its
clients, the owners of the retail park which leased units to retailers. It undertook to
manage the car park in a way which benefitted the owners and the retailers and also
the public seeking to visit units within the retail park by encouraging the public to
remain in the car park for no longer than two hours. ParkingEye imposed the parking
charge in order to encourage the prompt turnover of car parking spaces and also to
fund its own business activities and make a profit.
287. That legitimate interest would not justify the parking charge if it were out of
all proportion to that interest, or, in other words, exorbitant. In deciding whether the
charge was exorbitant, I think that the court can look at the statutorily authorised
practice of local authorities in England and Wales and also the recommendations of
the accredited trade association, the BPA. Neither is conclusive and the question is
ultimately a value judgment by the court. But local authority practice, the BPA
guidance, and also the evidence that it is common practice in the United Kingdom
to allow motorists to stay for two hours in such private car parks and then to impose
a charge of £85, support the view that such a charge was not manifestly excessive.
There was no other evidence that suggested otherwise. In so far as the criterion of
unconscionableness allows the court to address considerations other than the size of
the penalty in relation to the protected interest, the fact that motorists entering the
car park were given ample warning of both the time limit of their licence and the
amount of the charge also supports the view that the parking charge was not
unconscionable.
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288. I therefore conclude that the rule against penalties is no bar against the
enforcement of the parking charge imposed on Mr Beavis.
Mr Beavis’s other ground of appeal: the Unfair Terms in Consumer Contracts
Regulations 1999
289. I was initially in some doubt about the correct answer to this challenge. But
on further consideration I am persuaded for the reasons given by Lord Neuberger
and Lord Sumption and also by Lord Mance that the £85 charge did not infringe the
1999 Regulations.
Conclusion
290. I would therefore allow the appeal in Cavendish v El Makdessi and dismiss
the appeal in ParkingEye v Beavis and make the declarations that Lord Neuberger
and Lord Sumption propose in para 115 of their joint judgment.
LORD CLARKE:
291. I agree that the appeal in Cavendish should be allowed, that that in Beavis
should be dismissed and that we should make the declarations proposed by Lord
Neuberger and Lord Sumption. In reaching those conclusions I agree with the
reasoning of Lord Neuberger and Lord Sumption, Lord Mance and Lord Hodge,
save that on the question whether clauses 5.1 and 5.6 are capable of constituting
penalties, I agree with Lord Hodge in having an open mind about clause 5.1, and in
concluding that clause 5.6 is a secondary obligation – see paras 270 and 280
respectively. As to the relationship between penalties and forfeiture, my present
inclination is to agree with Lord Hodge (in para 227) and with Lord Mance (in paras
160 and 161) that in an appropriate case the court should ask first whether, as a
matter of construction, the clause is a penalty and, if it answers that question in the
negative, it should ask (where relevant) whether relief against forfeiture should be
granted in equity having regard to the position of each of the parties after the breach.
LORD TOULSON: (dissenting in part on ParkingEye Limited)
292. I agree with paras 116 to 187 of the judgment of Lord Mance and paras 216
to 283 of the judgment of Lord Hodge. In short, I agree with them on all points of
general principle about the doctrine of penalties, its interrelationship with forfeiture
and the application of the principles in the Cavendish case.
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293. On the essential nature of a penalty clause, I would highlight and endorse
Lord Hodge’s succinct statement at para 255 that “the correct test for a penalty is
whether the sum or remedy stipulated as a consequence of a breach of contract is
exorbitant or unconscionable when regard is had to the innocent party’s interest in
the performance of the contract”. Parties and courts should focus on that test, bearing
in mind a) that it is impossible to lay down abstract rules about what may or may
not be “extravagant or unconscionable”, because it depends on the particular facts
and circumstances established in the individual case (as Lord Halsbury said in the
Clydebank case, [1905] AC 6, 10, and Lord Parmoor said in the Dunlop case, [1915]
AC 79, 101), and b) that “exorbitant or unconscionable” are strong words. I agree
with Lord Mance (para 152) that the word “unconscionable” in this context means
much the same as “extravagant”.
294. On the inter-relationship between the law relating to penalties and forfeiture
clauses, I agree specifically with paras 160-161 of Lord Mance’s judgment and paras
227-230 of Lord Hodge’s judgment. Ms Smith argued in her written case and orally
that if relief were to be granted at all to Mr El Makedessi it should be pursuant to
the relief against forfeiture, because clauses such as 5.1 were properly to be regarded
as forfeiture clauses and the penalty doctrine was therefore not capable of being
applied. I would reject that argument for the reasons given by Lord Mance and Lord
Hodge. I agree with them that the proper approach is to consider first whether the
clause was an exorbitant provision to have included in the contract at the time when
it was made; and, if not, to consider next whether any relief should properly be
granted under the equitable doctrine of relief against forfeiture in the circumstances
at and after the time of the breach. As Lord Mance and Lord Hodge have noted, this
approach was followed by the Court of Appeal (Ackner, Kerr and Dillon LJJ) in
BICC plc v Bundy Corpn [1985] Ch 232. It is logical and just.
295. I disagree with the other members of the court in the parking case. Since I am
a lone voice of dissent and the judgments are already exceedingly long, I will state
my reasons briefly. Everyone agrees that there was a contract between Mr Beavis
and ParkingEye, but I begin by looking at what was the consideration for, and
essential content of, the contract. The parties were content to argue the case, as they
had in the Court of Appeal, on the basis that by using the car park Mr Beavis entered
into a contract by which he agreed to leave it within two hours; and that his failure
to do so was a breach of contract for which he agreed to pay £85 (subject to a
discount for prompt payment). Moore-Bick LJ expressed doubt whether this was the
correct analysis, and since this is a test case it is right to consider the matter.
296. Where parties intend to enter into legal relations, it does not require much to
constitute consideration. Some benefit must be conferred both ways; but the benefit
provided by the promisor does not have to be for the promisee personally; it may be
for some third party whom the promisee wishes to benefit. (This has nothing to do
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with the doctrine of privity.) Any act or promise in exchange for an act or promise
can constitute consideration.
297. In this case we are concerned with a car park forming an integral part of a
retail park occupied by a number of well-known chains. The use of the car park was
not merely a benefit to the user. It was of obvious benefit to the freeholder (and the
lessees of the retail outlets) that members of the public should be attracted to the
retail park by its availability, and that was no doubt why it was provided. As Mr
Christopher Butcher QC correctly submitted, the use of the car park by Mr Beavis
was sufficient consideration for a contract governing the terms of its usage. The form
of notice stated that “Parking is at the absolute discretion of the site”, but once a
motorist had parked he would obviously have to be given reasonable notice of a
requirement to leave.
298. The most important term of the contract was that the user was permitted to
stay for a maximum of two hours. That requirement was displayed in bigger and
bolder letters than anything else. There were subsidiary requirements; that the user
should not return within one hour after leaving; that parking should be within the
bays marked; and that certain bays were restricted to use by blue badge holders (ie
persons with mobility problems). The contract further stated, although this was not
legally necessary, that “By parking within the car park, motorists agree to comply
with the car park regulations”, meaning the provisions stated in the notice (since
there were no other regulations). Overstaying would therefore be a breach of
contract (as, for example, would be parking except within the lines of an appropriate
marked bay). In the case of a breach of any description, the user agree to pay the
sum of £85. This was therefore, as the parties rightly accepted, an agreement to pay
a specified figure for a breach of contract. It was not an agreement allowing a
motorist to overstay in consideration of a payment of £85. On overstaying (or for
that matter on returning within one hour after leaving the car park) the user would
be a trespasser. We are not concerned in this case whether the agreement to pay £85
would leave the landowner free to sue the user for damages for trespass, although
he would no doubt in theory be entitled to seek injunctive relief.
299. It is convenient to consider the effect of the Unfair Terms in Consumer
Contracts Regulations 1999 (“the Regulations”) before considering the effect of the
common law on penalty clauses. Regulation 8(1) provides that an unfair term in a
contract concluded with a consumer by a seller or supplier shall not be binding on
the consumer. An unfair term is defined in regulation 5(1):
“A contractual term which has not been individually negotiated
shall be regarded as unfair if, contrary to the requirement of
good faith, it causes a significant imbalance in the parties’
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rights and obligations arising under the contract, to the
detriment of the consumer.”
300. Regulation 6(1) requires the question of unfairness to be assessed, taking into
account the nature of the goods or services, and by referring to all the circumstances
at the time of the conclusion of the contract and to all the other terms of the contract.
301. Regulation 6(2) excludes from the assessment of fairness terms (provided
that they are in plain intelligible language) relating to the definition of the main
subject matter of the contract or to the adequacy of the price or remuneration, as
against the goods or services supplied in exchange. The term which levies £85 on a
user of the car park who overstays, or returns within an hour or parks badly, does
not provide remuneration for the services of ParkingEye, nor does it relate to the
definition of the subject matter of the contract. It is simply a penalty for doing one
of the things prohibited. Its enforceability depends on whether it satisfies the
requirement of fairness within the meaning of the Regulations.
302. Schedule 2 to the Regulations provides an indicative list of terms which may
be considered unfair, including a term requiring a consumer who fails to fulfil his
obligation to pay a disproportionately high sum in compensation.
303. The Regulations give effect to the European Council Directive 93/13/EEC of
5 April 1993 on unfair terms in consumer contracts (“the Directive”). Article 3(1)
of the Directive is the counterpart to regulation 5(1) and is identically worded.
304. In Director General of Fair Trading v First National Bank plc [2001] UKHL
52, [2002] 1 AC 481, para 17, Lord Bingham described this provision as laying
down a composite test, covering both the making and the substance of the contract,
which must be applied bearing in mind the object which the Regulations are
designed to promote. He said that fair dealing requires that the supplier should not,
deliberately or unconsciously, take advantage of the consumer’s necessity,
indigence, lack of experience, unfamiliarity with the subject matter of the contract,
weak bargaining position or any factor listed in or analogous to those listed in the
Schedule.
305. In the same case Lord Millett, at para 54, suggested as a matter for
consideration whether, as between parties negotiating freely a contract on level
terms, the party adversely affected by the term “or his lawyer” might reasonably be
expected to object to it.
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306. More recently in Aziz v Caixa d’Estalvis de Catalunya, Tarragona i Manresa
(Case C-415/11) [2013] 3 CMLR 89, the Court of Justice of the European Union
has addressed the interpretation of article 3(1) of the Directive. It observed (at para
44) that the system of protection introduced by the Directive is based on the idea
that the consumer is in a weak position vis-à-vis the seller or supplier.
307. In agreement with the opinion of Advocate General Kokott, the court held
that the reference in article 3(1) to a “significant imbalance” in the parties’ rights
and obligations under the contract must be interpreted as requiring the court to
evaluate to what extent the term places the consumer in a worse position than would
have been the situation under the relevant national law in the absence of that term.
Applying that test, it follows that the £85 penalty clause created a significant
imbalance within the meaning of the regulation, because it far exceeded any amount
which was otherwise likely to be recoverable as damages for breach of contract or
trespass.
308. As to whether the imbalance was contrary to the requirement of good faith,
the court, at para 76 in agreement with the Advocate General held that
“in order to assess whether the imbalance arises ‘contrary to the
requirement of good faith’, it must be determined whether the
seller or supplier, dealing fairly and equitably with the
consumer, could reasonably assume that the consumer would
have agreed to the term concerned in individual contract
negotiations.”
309. That test is significantly more favourable to the consumer than would be
applied by a court in this country under the penalty doctrine. Whereas the starting
point at common law is that parties should be kept to their bargains, and it is for
those objecting that a clause is penal to establish its exorbitant nature, the starting
point of the Directive is that the consumer needs special protection, and it is for the
supplier to show that a non-core term which is significantly disadvantageous to the
consumer, as compared with the ordinary operation of the law without that term, is
one which the supplier can fairly assume that the consumer would have agreed in
individual negotiations on level terms. The burden is on the supplier to adduce the
evidence necessary to justify that conclusion.
310. I do not consider that such an assumption could fairly be made in the present
case. The Consumers’ Association through Mr Butcher advanced a number of telling
points. By most people’s standards £85 is a substantial sum of money. Mr Butcher
reminded the court by way of comparison that the basic state pension is £115 per
week. There may be many reasons why the user of a car park in a retail park may
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unintentionally overstay by a short period. There may be congestion in the shops or
the user may be held up for any number of reasons. There may be congestion trying
to get out of the car park. In short there may be numerous unforeseen circumstances.
No allowance is made for disabilities (other than the provision of bays for blue badge
holders). Similarly there may be good reasons for a person to return to the car park
within two hours, for example because the shopper has left something behind (and
the car park may incidentally be half empty). There may be reasons why a user parks
with his wheels outside the marked bay (for example because of the way the adjacent
vehicle is parked or because he is a wheelchair user and none of the blue bays are
available). Examples could be multiplied. The point is that the penalty clause makes
no allowance for circumstances, allows no period of grace and provides no room for
adjustment.
311. The court was referred to a code of practice published by the British Parking
Association which addresses some of these matters, but the significant fact is that it
is not a contractual document. A competent lawyer representing a user in individual
negotiation might be expected, among other things, to argue that the supplier should
at least commit to following the code of practice.
312. More broadly the penalty clause places the whole cost of running the car park
on the shoulders of those who overstay by possibly a very short time, although their
contribution to the cost will have been very small. The trial judge and the Court of
Appeal were impressed by a comparison with the charges at local authority car
parks. The comparison is seductive but superficial. Apart from the fact that local
authorities operate under a different statutory scheme, a large amount of the cost is
raised from all users by hourly charges, as distinct from placing the entire burden on
the minority of overstayers; and there is not the same feature in the case of a
municipal car park as there is in a supermarket car park, where the car park is
ancillary to the use of the retail units some of whose customers are then required to
underwrite the entire cost as a result of overstaying.
313. There is of course an artificiality in postulating a hypothetical negotiation
between the supplier and an individual customer with the same access to legal
advice, but because it is a consumer contract, and because the supplier is inserting a
term which alters the legal effect under the core terms in the supplier’s favour, the
supplier requires as it were to put itself in the customer’s shoes and consider whether
it “can reasonably assume that the customer would have agreed” to it.
314. I am not persuaded that it would be reasonable to make that assumption in
this case and I would therefore have allowed the appeal. It has been suggested that
managing the effective use of parking space in the interests of the retailer and the
users of those outlets who wished to find spaces to park could only work by deterring
people from occupying space for a long time. But that is a guess. It may be so; it
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may not. ParkingEye called no evidence on the point. But it is common knowledge
that many supermarket car parks make no such charge. I return to the point that it
was for ParkingEye to show the factual grounds on which it could reasonably
assume that a customer using that car park would have agreed, in individual
negotiations, to pay £85 if he overstayed for a minute, or parked with his wheels not
entirely within a marked bay, or for whatever reason returned to the car park in less
than one hour (perhaps because he had left something behind). On the bare
information which was placed before the court, I am not persuaded that ParkingEye
has shown grounds for assuming that a party who was in a position to bargain
individually, and who was advised by a competent lawyer, would have agreed to the
penalty clause as it stood.
315. Lord Neuberger and Lord Sumption in para 107 have substituted their
judgment of reasonableness of the clause for the question whether the supplier could
reasonably have assumed that the customer would have agreed with the term, and
on that approach there is not much, if any, difference in substance from the test
whether it offended the penalty doctrine at common law. That approach is consistent
with their statement in para 104 that the considerations which show that it is not a
penalty demonstrate also that it does not offend the Regulations. I consider that the
approach waters down the test adopted by the CJEU and at the very least that the
point is not acte clair.
316. Mr Beavis’s argument that the clause was a penalty at common law is more
questionable, but in the circumstances nothing would be gained by discussing that
matter further.
Draft Order In the County Court at Leicester
Claim Number:
Date: xxxxxxx
HX Carpark Management Limited (Claimant)
(Defendant)
DRAFT ORDER
Before District Judge Severn sitting at the County Court at Leicester Upon reading the court file and an email from the Defendant and having applied the court's duty in the Consumer Rights Act 2015, s71 'test of fairness' against the information provided by both parties, IT IS ORDERED THAT
1. The claim is struck out as an abuse of process. 2. This order has been made by the court of its own initiative without a hearing pursuant
to Rule 3.3(4) of the Civil Procedure Rules 1998 and a party affected by the order may apply to the court to have it set aside, varied or stayed not more than 7 days after the date the order was served upon that party.
REASON
(a) The claim contains a substantial charge additional to the parking charge which it is alleged the driver was contracted to pay. This additional charge is not recoverable under the Protection of Freedoms Act 2012 Schedule 4 nor with reference to the binding Supreme Court judgement, which expressly approved the parking charge because it included costs of administration (ParkingEye Ltd v Beavis [2015] UKSC67 - paragraphs 98,193 and 198). Additionally, s71(2) of the Consumer Rights Act 2015 requires the court to consider the fairness of a contract term/notice, and the inclusion of additional charges falls into examples 6, 10, 14 and 18 of the indicative list of unfair terms in Schedule 2 of the Act. It is an abuse of process for the Claimant to issue a knowingly inflated claim for an additional sum which it is not entitled to recover.
