ParkingEye Ltd v Somerfield Stores Ltd
| Jurisdiction | England & Wales |
| Judge | Sir Robin Jacob,Lord Justice Toulson,Lord Justice Laws |
| Judgment Date | 17 October 2012 |
| Neutral Citation | [2012] EWCA Civ 1338 |
| Docket Number | Case No: A3/2011/0909 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 October 2012 |
[2012] EWCA Civ 1338
Lord Justice Laws
Lord Justice Toulson
and
Sir Robin Jacob
Case No: A3/2011/0909
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
MANCHESTER MERCANTILE COURT
HHJ HEGARTY Q.C.
Royal Courts of Justice
Strand, London, WC2A 2LL
Michael FEALY (instructed by Legal Department of the Co-operative) for the Appellant
Clive FREEDMAN Q.C. and Andrew GRANTHAM (instructed by Pannone LLP) for the Respondents
Hearing date: 25 July 2012
Sir Robin Jacob (giving the first judgment at the invitation of Laws LJ):
This appeal is by Somerfield from one aspect only of the judgment dated 18 th March 2011 of HHJ Hegarty QC sitting as a High Court Judge in Manchester. Mr Michael Fealy appeared for the appellants, Somerfield and Mr Clive Freedman QC and Mr Andrew Grantham for the respondents, ParkingEye.
The Facts and Background
The parties entered into a contract dated 19 th August 2005 with a commencement date of 1 st September 2005. It was for the provision by ParkingEye of an automated monitoring and control system to some of the car parks owned or operated by Somerfield as adjuncts to its supermarkets. The system read and recorded the vehicle registration numbers and times of entry and departure of vehicles using the car park. The system could thus determine how long a vehicle was parked.
As is common with supermarkets, customers are given a certain amount of free parking time. Under the ParkingEye scheme, after that had expired, a charge was imposed. The Judge found that sufficient notice of the charges was given to create a contract between the motorist and Somerfield whereby the motorist was contractually bound to pay Somerfield the charges of which notice was given if he or she overstayed.
The ParkingEye system was designed to catch those who overstayed and induce them to pay the charges. The names and addresses of the owners of overstaying vehicles were, using the registration number, obtained from the Driver and Vehicle Licensing Agency. ParkingEye would then send a letter of demand for the charge. If no payment or response was received, a second, third and even fourth letter in stronger and stronger terms would be sent.
The basic charge was £75, reduced to £37.50 if paid within 14 days of the "Penalty Ticket," i.e. the first letter. This amount the Judge held not to be a penalty and thus enforceable as against the motorist. If payment was not made within a specified time the charge increased to £135 which the Judge held was probably a penalty and thus unenforceable.
Under the contract, ParkingEye provided all the equipment and were responsible for its operation. It received no payment from Somerfield for this. Instead it was entitled to retain all the "fines" collected. So of course ParkingEye had an incentive to operate the "fine" system aggressively.
This it did – too much so: some of the letters it wrote to motorists contained falsehoods. The first letter was not so held. It perhaps might have been. For it was dressed up rather like police issued document with a chequered edging and described the amount claimed as a "penalty" when it was no more than a contractual obligation to pay. I say no more because there is no challenge to the finding that this was not a false representation. The letter claimed £75 but £37.50 if paid within 14 days.
The second letter called itself a "Parking Charge Reminder". Again it was held not to contain any falsehood, despite its police style edging, the use of the word "penalty" and even the assertion, which would not have been true if the motorist who had actually overstayed had not been the owner of the vehicle as registered with the DVLA, that "as keeper, owner or hirer of the vehicle in question … you are responsible for the outstanding PARKING CHARGE NOTICE". There is no challenge to the Judge's finding in this regard.
The third letter was different. This was held to contain serious falsehoods. By this stage ParkingEye transferred the collection of money from the defaulting motorist to a company called Commercial Collection Services Ltd. This company issued the third (and in default of payment) fourth letters.
The third letter, sent seven days after the second if payment had not been made, was issued by "Commercial Collection Services". It was headed "Debt £75 Due to PARKING EYE (sic)". The key passages read (the emphasis is in the original):
I promise this isn't just another debt collector's letter. If you read it I believe that you will understand.
My client is determined to protect the interests of their genuine customers, so they are therefore prepared to go "all the way." The cost of the issue of proceedings for what you might regard as a rather small amount is irrelevant to them, as you will understand. Customers are of paramount importance.
"As PARKING EYE have explained to you already, their objective is to deter the dishonest, the people who are not their genuine customers.
You may choose to ignore this demand but that approach will not succeed. PARKING EYE will issue legal proceedings and will instruct us to prepare the documentation. The consequences of legal proceedings are, [the comma is in the original] that you would receive a Claim, and if you ignore that, a bailiff will attend your address, [comma in original] to remove goods.
If you prefer to avoid all the hassle and the costs (which will become substantial if our client's [apostrophe in original] the means of payment are set out below and overleaf.
This semi-literate letter was false in a number of respects:
i) It said that the debt was due to ParkingEye. It was not. It was due to Somerfield.
ii) It talked of "their genuine customers" which suggested the letter was sent on behalf of Somerfield. It was not.
iii) It said "ParkingEye will issue proceedings" indicating that ParkingEye had authority to do so. It did not.
iv) In any event neither ParkingEye nor Somerfield actually had any settled intention of issuing legal proceedings if the money was not paid. The contract provided by Schedule 2 that if the registered keeper did not pay after a fourth letter, no further action would be taken but detailed records of non-payers and persistent offenders would be stored. If Somerfield decided to sue ParkingEye was to assist.
v) In the case of any vehicle driven by someone other than the registered keeper the recipient of the letter was not liable at all.
In the event of non-payment there was a fourth letter in the same crude fashion. Its most aggressive passage reads:
You may not have considered also the implications of a judgment being recorded against you. Such as credit becoming more expensive. For you, with a judgment against you, interest rates could become very high, if you are able to obtain credit at all.
The letter ended with: "This is your last chance."
The Judge not only found that the third letter contained falsehoods but that those falsehoods were deliberately made by the relevant ParkingEye executive, albeit without dishonesty. Hence the Judge found ParkingEye was guilty of the tort of deceit on those occasions when the third letter was sent on its behalf. ParkingEye does not challenge this decision.
Apart from the tort of deceit, Somerfield alleged other illegalities springing from the third letter. These were the offence of obtaining a money transfer by deception contrary to the Theft Act 1968 and the Fraud Act 2006 and unlawful harassment of a debtor contrary to s.40 of the Administration of Justice Act 1970. Somerfield abandoned the first of these allegations during the trial and the judge rejected the s.40 allegation from which there is no cross-appeal. In the result it was not shown that ParkingEye had committed any criminal offence. The third letter amounted only to a breach of civil law.
Prior to entry into the contract, on the balance of probabilities, the relevant Somerfield executive had seen the letters in draft and had approved them.
However the contract itself did not prescribe the form of the letters. All it said (in Schedule 2) was that:
A maximum of four Parking Fine letters are then generated and issued, explaining that the vehicle committed a parking offence on private land and as such a charge is now due.
The Schedule went on to provide for the timing and amounts to be paid but no more.
The Judge said this about ParkingEye's intentions:
[556] …. I am not satisfied that it would be right to conclude that ParkingEye had a firm and settled intention to act in an unlawful manner at the time when the Agreement was executed. As I have already pointed out, the form and content of the various notices was not prescribed. Nor, indeed was there any provision on the face of the contract conferring any right of veto on Somerfield in relation to their form and content. It was open to ParkingEye at any time, no doubt in consultation with Somerfield, to decide what form the third and fourth letters should take. As I have previously observed, I have little doubt that if Somerfield had, at any time, required changes to these letters, ParkingEye would have complied with its wishes.
The first sentence, out of context, is a little puzzling, since at the time of execution of the contract ParkingEye did intend, if it came to it, to use the unlawful third letter as the Judge had discussed in detail. But the sentence in context makes sense if one reads the sentence as saying that it would be wrong to conclude that ParkingEye had a firm intention always to act in an unlawful manner...
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