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Fines and Liquidated Damages: What you need to know about shopping centre parking

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  • 15th July 2015

by Ben Harris.  

Some of our members have been getting what looks like a parking infringement on their windscreen when they return to their car after work. The ‘Non-compliance Breach Notice’, however, is not a parking infringement but a claim for liquidated damages for breaching the ‘contractual terms’ of parking at the shopping centre whilst they worked inside.

Local government authorities can issue parking infringements but private operators cannot. The private enterprise is seeking ‘liquidated damages’ for an alleged breach of contract. What contract you ask? Well it’s likely that there was an innocuous sign somewhere around when you first pulled into the carpark that had a whole bunch of ‘small print’ on it. The car park operators will argue that that means by parking you have agreed to the terms and conditions and entered into a contractual arrangement with them. By breaching these terms (by overstaying) they claim that you have caused them damage and they ask for liquidated damages to be paid.

Contractual terms that are penalties are not enforceable. However, the concept of liquidated damaged is an old concept that is legally enforceable in the right circumstances. Traditionally damages in contracts are enforced by demonstrating the actual loss caused by a breach of contract and seeking to compensate for that specific loss. However, in some circumstances this is not appropriate (especially where the loss was costly or difficult to calculate). The idea was that parties could agree at the time of forming a contract on a fair calculation of the cost of the breach, called liquidated damages. To prevent them becoming a pseudo-penalty the courts have over the years imposed certain restrictions on liquidated damages. The case law in this area was established in Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Lts [1915] AC  79. Lord Dunedin said:

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

(b)  It will be held to be a penalty if the breach consists only in not paying a sum of money, and the sum stipulated is a sum greater than the sum which ought to have been paid …

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

On the other hand:

(d)   It is no obstacle to the sum stipulated being a genuine pre-estimate of damage, that the consequences of the breach are such as to make precise pre-estimation almost an impossibility.”

Although this was a British case the principles have been applied by the High Court of Australia on numerous occasions. A recent decision in Victoria, Vico v Care Park Pty Ltd [2014] VCAT 565 shows how the balance of unenforceable penalty versus legitimate liquidated damages plays out in a parking context.

Mr Vico drove his car into a car park operated by Care Park Pty Ltd (CP). CP charged the public a fee ranging from $5 for an hour to $15 for up to 12 hours. Realising that the ticketing machine was coin operated and that he had insufficient coins, Mr Vico walked until he found a convenience store where he got change so that he could properly pay for parking.

When he returned he found that CP had already put an infringement notice on to the windscreen of his car. The infringement notice stated that he was required to pay $88 in liquidated damages or if he paid within 14 days it would be $66. Mr Vico did not pay either sum and CP sent him a letter demanding payment. He ignored this. CP then sent him a “final demand for payment” letter claiming that he now owed them $88 plus an unspecified amount for ‘legal costs’. It was at this point Mr Vico took CP to the Victorian Civil and Administrative Tribunal seeking relief from CP’s claims against him.

The member who dealt with the matter, S. Wilson, was emphatic that CP’s claim for $88 was “an ambit sum and bears no relationship or proportionality to the non-payment of $15”. Wilson went on to say:

“The stipulated sum of $88 when compared to the sum of $15 was “out of all proportion”, it was “extravagant and unconscionable”, it was “in the nature of a punishment” and it was not “a genuine pre-estimate of loss”.

If members are unfortunate enough to find something stuck to their windscreen when they return to their cars they should read it carefully. Local government authorities are able to issue parking fines. Private operators do not necessarily have an enforceable right to penalise you, even if they dress it up as ‘liquidated damages’.

If this has happened to you, please get in contact with the union through [email protected] or on 1300 ASK SDA (1300 275 732).  

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Testimonials

Free advice, assistance when required, negotiators improving my working conditions, discount vouchers and competitions - why wouldnt you be a member??  


You should join the SDA because the SDA can give help and guidance. It’s like insurance for your job. Peace of mind with the SDA.  


When people join together and be part of the union we are helping each other have support and rules for work, I dont want to be the one standing alone!  


Joining the union is the next best thing to having a guardian angel by your side and you can count on that!!