Keywords: Vehicle Control Services – B W Legal – Smyth Street car park Wakefield – penalty notice – terms and conditions.
In August 2016, a friend (‘S’) parked a courtesy car in the Smyth Street car park in Wakefield. The car park is operated by Vehicle Control Services. S paid using the RingGo mobile phone app and forgot to change the registration number from her usual car to the courtesy car. Vehicle Control Services issued a £60 parking charge notice and sued S when she refused to pay. The case came to trial in July 2018. Vehicle Control Services lost comprehensively. The judgement suggests there is no obligation to pay any parking charge notice issued for the car park.
On 4 August 2016, my friend (‘S’) parked a courtesy car in the Smyth Street car park in Wakefield. The car park is operated by Vehicle Control Services Limited (company number 02498820). S had parked her own car in the car park many times before and paid using the RingGo app on her mobile phone. When S parked the courtesy car, she paid using the app but did not change the registration number from her car to the courtesy car. The Vehicle Control Services (VCS) number plate recognition system identified that no parking fee had been paid for the courtesy car. VCS got the registered keeper information of the courtesy car from the DVLA and then S’s details from the company which owned the courtesy car.
VCS sent S a £60 parking charge notice (PCN). S emailed them to explain what had happened – she’d made a mistake and paid for the wrong car – and expected them to withdraw the PCN. VCS offered to cancel the PCN for a payment of £10 but S ignored the offer because she did not owe VCS £10. The PCN increased to £100.
S then received letters from VCS’s solicitors B W Legal Services Limited (company number 07966978). The charge had now increased to £160 and legal action was threatened. S ignored the correspondence because she was confident nobody would start a court claim for a case it would have settled for £10.
S was wrong and in January 2018, B W Legal issued a claim for £245 on behalf of VCS. S filed a defence at court. By the time the case came to trial B W Legal were claiming £450 on behalf of VCS.
2. The Trial
Witness statements were exchanged before trial. There were no significant factual disputes: it was agreed S had parked the courtesy car and paid for her car. What was in dispute was the law: could VCS charge £100 where someone paid using the wrong registration number. S put her legal arguments in a skeleton argument. Extracts from the skeleton argument are below. S’s arguments included:
- She had not breached VCS’s terms and conditions. One section of the sign in the car park (see the image) was headed ‘terms and conditions’. These terms and conditions did not include any reference to PCNs. All the other information on the sign was not part of the ‘terms and conditions’ and not legally binding.
- She was not bound by the contract because VCS had not complied with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. The contract was a distance contract and for S to be bound by the terms and conditions, VCS had to notify S of them within the RingGo app. VCS had not done so and S was not bound by the contract, including the issue of any PCNs.
- The leading case on parking charges – ParkingEye Limited v Beavis  UKSC 67 did not apply because the charge in this case was obviously a penalty.
The judge agreed with S on all these points. VCS did not recover the PCN charge, the court fees or costs – it got nothing from S. And the judge ordered VCS to pay S £100 in witness expenses.
S’s case challenged the validity of VCS’s car park signs. If the judge agreed with S on this point, it meant VCS could only rely on the terms and conditions in the part of the sign headed ‘terms and conditions’. These ‘terms and conditions’ do not say that a penalty is payable for: entering the wrong registration number; not paying at all; or overstaying. The judge agreed with S and it seems VCS cannot issue a valid PCN for the car park and all the PCNs it has issued for the car park are not legally binding. It seems incredible that VCS’s solicitors – B W Legal – did not spot the problem; or if they did, VCS did nothing to change the signs.
The judge also decided the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 applied. Because VCS had not complied with them, S was not bound by VCS’s terms and conditions. Finally, the judge decided that VCS’s £60 charge for entering an incorrect registration number is a penalty and invalid.
In addition to losing – and losing badly – there are concerns about how the case was conducted. B W Legal’s claim form was poor. It did not, for example, identify that the claim was for breach of contract. The witness statement from B W Legal was not prepared competently: it failed to evidence what the car parks signs said – the text was illegible; it went beyond matters of fact and made submissions on the law; and some of the submissions on the law – particularly in relation to ParkingEye Limited v Beavis – were completely misleading. At trial VCS were represented by an unqualified advocate who seemed to have no understanding of the legal issues. B W Legal says it is the number one issuer of claims in the UK. It might be number one for quantity but it’s certainly not number one for quality.
In any litigation it is crucial that your solicitor gives you good advice on your prospects of success – the percentage chance of you winning – and what the effect of losing might be. In this case, the chances of VCS losing were very high and the effect of losing was to invalidate its terms and conditions. I cannot understand why B W Legal did not advise VCS – in the strongest terms – to withdraw the claim. Or – since it is possible this advice was given – why VCS ignored the advice.
3. Skeleton Argument
Here are extracts from S’s skeleton argument:
1. Having received the Defendant’s evidence, the Claimant puts her submissions on the law in writing to enable the rapid resolution of issues at trial. References in brackets with a [C] are to the Claimant’s witness statement and with a [D] are to the Defendant’s witness statement.
B. Breach of contract – the Claimant’s terms and conditions have not been breached.
9. The Claimant relies on various pieces of evidence as to the terms and conditions of the contract. The evidence includes photos of the actual signage at pages 29 to 30 of Claimant’s bundle and ‘artwork’ signage at pages 32 and 33.
10. It is unfortunate, to say the least, that the Claimant has not filed or served photographic evidence where it is possible to read the actual signage. Nor is there any evidence to the effect that the ‘artwork’ signage – itself barely legible – corresponds to the actual signage. The Defendant submits that the Claimant cannot prove its case in these circumstances.
11. Further, even if the court accepts that the ‘artwork’ signage matches the actual signage, the claim cannot succeed. The Defendant’s terms and conditions are in a blue rounded box with white text which appears to the right of the main sign. At the top of that box and inset is a white rounded box in which appear in blue the words “Terms and Conditions”.
12. On any view – whether the intention of the Claimant in designing the main sign or of a reasonable person reading the sign and asking the question “What are the terms and conditions?” – the terms and conditions are those contained in the blue rounded box.
13. There are, therefore, only two relevant terms and conditions which appear in the blue rounded box: “It is important that you enter the FULL and ACCURATE REGISTRATION NUMBER of the vehicle onsite when making payment” and “If you fail to comply with these Terms and Conditions Vehicle Control Services Ltd and/or its agents may request the registered keeper’s details from the DVLA to trace the responsible owner.”
14. Putting the matter shortly: there is no term or condition to the effect that a failure to enter the correct registration number allows the Claimant to recover damages. The most the Claimant can do is to request the registered keeper’s details.
15. There is a statement (tucked away – presumably intentionally – at the very foot of the main sign) that “By entering this private land you agree to pay a Parking Charge if you fail to comply with the terms and conditions. The Parking Charge is £100.00 (payable within 28 days of the Parking Charge Notice issue date.” However, this is not part of the terms and conditions.
16. It is anticipated that the Claimant might argue that this statement is incorporated into the terms and conditions. But this cannot be right: at law a reasonable person must be entitled to read what the Claimant says are its terms and conditions, conclude she has read them and act accordingly. A reasonable person cannot, in general, be expected to seek out further terms and conditions on which the Claimant might seek to rely. This is, in particular, true where the actual terms and conditions do not include the possibility that other terms may be incorporated.
17. If the Claimant wanted to charge £100 for a failure to enter the correct registration number then it was incumbent on the Claimant to include this in its terms and conditions. It did not do so and there is no such term or condition. There has been no breach of contract.
D. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations
21. The Defendant submits that the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134) (‘the Regulations’) apply.
22. The definition of a distance contract in regulation 5 is: a contract concluded between a trader and a consumer under an organised distance sales or service-provision scheme without the simultaneous physical presence of the trader and the consumer, with the exclusive use of one or more means of distance communication up to and including the time at which the contract is concluded.
23. The Defendant made payment using the RingGo mobile phone app (‘RingGo’). The Defendant anticipates the words ‘an organised distance sales or service-provision scheme’ and ‘exclusive use of one or more means of distance communication up to and including the time at which the contract is concluded’ are in issue.
24. In relation to the former, the Regulations appear to provide no interpretative assistance. However, the Directive the Regulations implement (Consumer Rights Directive 2011/83/EU) states at para (14) of the recital: “The notion of an organised distance sales or service-provision scheme should include those schemes offered by a third party other than the trader but used by the trader, such as an online platform. It should not, however, cover cases where websites merely offer information on the trader, his goods and/or services and his contact details.” The service offered by RingGo is, of course, exactly that contemplated by the Directive: an online third party platform used by the Claimant.
25. In relation to the latter, the Claimant might argue that the signage is a communication and, therefore, there is no exclusive use of one or more means of distance communication. Para (20) of the recital states: “The definition of distance contract should cover all cases where a contract is concluded between the trader and the consumer under an organised distance sales or service-provision scheme, with the exclusive use of one or more means of distance communication (such as mail order, Internet, telephone or fax) up to and including the time at which the contract is concluded. That definition should also cover situations where the consumer visits the business premises merely for the purpose of gathering information about the goods or services and subsequently negotiates and concludes the contract at a distance.”
26. The implementing guidance from the Department for Business, Innovation and Skills answers the question “What is a distance contract or an off premises contract?” with the answer “Phone and online sales, where the trader and consumer are not physically together, are distance contracts.” (see: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/429300/bis-13-1368-consumer-contracts-information-cancellation-and-additional-payments-regulations-guidance.pdf). It is submitted the definition is designed to exclude contracts where there is face-to-face contact. There was no face-to-face contact – or communication – between the Claimant and Defendant and the contract is therefore a distance contract.
27. The Regulations are extensive. The Defendant submits the further salient points are:
the Claimant is a trader: providing parking services is its trade – it was acting for purposes relating to its trade (regulation 2);
the Defendant is a consumer: her trade or profession is not using parking services and she was acting for purposes outside her trade or profession (regulation 3);
none of the limits of application apply in that the contract was not for gambling, banking, residential accommodation, construction etc (regulation 6);
the contract was a service contract in that the Claimant agreed to supply the Defendant with a parking service and the Defendant paid the price (regulation 5);
Part 2 of the Regulations apply to distance contracts (regulation 7(1));
Part 2 of the Regulations apply to distance contracts irrespective of the contract price – there is no financial minimum as for off-premises contract (regulation 7(4));
the contract was not for medicinal services and is therefore covered by Part 2 of the Regulations (regulation 7(2));
28. Part 2 of the Regulations includes regulations 13 and 14. Regulation 13 states that before a consumer is bound by a distance contract, the trader must give or make available to the consumer the information listed in Schedule 2 in a clear and comprehensible manner, and in a way appropriate to the means of distance communication used.
29. Regulation 14 provides that where a distance contract is concluded by electronic means, the trader must make the consumer aware in a clear and prominent manner, and directly before the consumer places the order, of the information listed in paragraphs (a), (f), (g), (h), (s) and (t) of Schedule 2.
30. Schedule 2 (“Information relating to distance and off-premises contracts”) includes the following paragraphs:
(a) the main characteristics of the goods or services, to the extent appropriate to the medium of communication and to the goods or services;
(f) the total price of the goods or services inclusive of taxes, or where the nature of the goods or services is such that the price cannot reasonably be calculated in advance, the manner in which the price is to be calculated,
(g) where applicable, all additional delivery charges and any other costs or, where those charges cannot reasonably be calculated in advance, the fact that such additional charges may be payable;
31. Putting the matter shortly, the Defendant required the Claimant to enter the correct registration number to RingGo or, in default, pay £100. This information should have been provided because it was either: one of the main characteristics of the service (para (a)); as information as to the total price of the service (para (f)); or as an ‘any other cost’ or an ‘additional charge’ payable (para (g)).
32. On the Defendant’s evidence, the information was not in a clear an comprehensible manner, nor in a way appropriate to the means of distance communication used [D5] – i.e within the RingGo app – and, therefore, the Defendant is not bound by the contract. The Clamant cannot recover damages because the Claimant is not bound by the contract.
33. Although the Defendant’s evidence is to the effect that the information was not provided [D5], it is actually the Claimant which bears the burden of proof: regulation 17 provides that it is for the Claimant to prove the information was provided. The Claimant’s evidence is completely silent on the point.
34. At the risk of stating the obvious: if the Claimant wants to reduce the costs of collecting cash from parking machines by taking online payment, it must accept that because users no longer go to the machine to make payment, they no longer have the opportunity to read the terms and conditions. The Claimant must therefore provide the terms and conditions using the online payment system.
E. The Claimant’s reliance on ParkingEye v Beavis  UKSC 67.
35. The Claimant’s contentions in relation to ParkingEye are advanced by the Claimant’s solicitors: BW Legal a firm of solicitors regulated by the SRA. They are accompanied by a statement of truth. The contentions appear at [D26] and [D30] and are:
These proceedings are not distinguishable from ParkingEye v Beavis as both cases involved motorists who have breached the Terms and Conditions of parking in a car park run by a commercial operator on a profit making basis.
The Supreme Court further considered that PCN Charges (like this charge) in ParkingEye v Beavis serve a legitimate commercial interest and did not consider that imposing a similar charge as being unfair
36. The Defendant’s submission in relation to the Claimant’s first contention is that it is grossly misleading. The proceedings are plainly distinguishable from ParkingEye v Beavis.
37. The Defendant’s submission in relation to the Claimant’s second contention is that it is simply mendacious and an egregious breach of Outcome 5.1 of the SRA Code of Conduct: “You do not attempt to deceive or knowingly or recklessly mislead the court”. The Claimant’s solicitor, which specialises in parking claims, simply cannot believe its contention – that the Supreme Court decided that a parking charge like this one serves a legitimate commercial interest – is true.
38. Dealing with ParkingEye properly: firstly – on the basis that the Claimant relies on ParkingEye – the citation the Claimant fails to provide to the Court is  UKSC 67.
39. Secondly, the critical and determinative fact which the Claimant’s solicitor has chosen to omit is that ParkingEye is an overstaying case whereas this case is about providing the wrong registration number.
40. Thirdly – and most crucially – the Claimant’s contentions are a grotesque misrepresentation of Lord Sumption’s reasoning. In ParkingEye Lord Sumption engages in a careful analysis of the law relating to contractual penalty clauses [paras 1 to 43]. His conclusion, in general terms, is:
The real question when a contractual provision is challenged as a penalty is whether it is penal, not whether it is a pre-estimate of loss. These are not natural opposites or mutually exclusive categories. A damages clause may be neither or both. The fact that the clause is not a pre-estimate of loss does not therefore, at any rate without more, mean that it is penal. [para 31]
The true test is whether the impugned provision is a secondary obligation which imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation. The innocent party can have no proper interest in simply punishing the defaulter. His interest is in performance or in some appropriate alternative to performance. In the case of a straightforward damages clause, that interest will rarely extend beyond compensation for the breach, and we therefore expect that Lord Dunedin’s four tests would usually be perfectly adequate to determine its validity. [para 32]
In his speech, Lord Dunedin formulated four tests “which, if applicable to the case under consideration, may prove helpful, or even conclusive” (p 87). They were (a) that the provision would be penal 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) that the provision would be penal if the breach consisted only in the non-payment of money and it provided for the payment of a larger sum; (c) that there was “a presumption (but no more)” that it would be penal if it was payable in a number of events of varying gravity; and (d) that it would not be treated as penal by reason only of the impossibility of precisely pre-estimating the true loss. [para 21]
41. And, in relation to penalty terms in parking cases, Lord Sumption’s conclusion is:
In our opinion, while the penalty rule is plainly engaged, the £85 charge is not a penalty. The reason is that although ParkingEye was not liable to suffer loss as a result of overstaying motorists, it had a legitimate interest in charging them which extended beyond the recovery of any loss. The scheme in operation here (and in many similar car parks) is that the landowner authorises ParkingEye to control access to the car park and to impose the agreed charges, with a view to managing the car park in the interests of the retail outlets, their customers and the public at large. That is an interest of the landowners because (i) they receive a fee from ParkingEye for the right to operate the scheme, and (ii) they lease sites on the retail park to various retailers, for whom the availability of customer parking was a valuable facility. It is an interest of ParkingEye, because it sells its services as the managers of such schemes and meets the costs of doing so from charges for breach of the terms (and if the scheme was run directly by the landowners, the analysis would be no different). As we have pointed out, deterrence is not penal if there is a legitimate interest in influencing the conduct of the contracting party which is not satisfied by the mere right to recover damages for breach of contract. [para 99]
None of this means that ParkingEye could charge overstayers whatever it liked. It could not charge a sum which would be out of all proportion to its interest or that of the landowner for whom it is providing the service. But there is no reason to suppose that £85 is out of all proportion to its interests. [para 100]
42. Contrary to the Claimant’s contentions, the charge of £100 is plainly and obviously a penalty from whatever direction one approaches Lord Sumption’s reasoning.
43. Entering the correct registration number must be a secondary obligation as opposed to the primary obligations – which the Defendant met – of making payment and not overstaying. Demanding a payment of £100 for entering the wrong registration number is plainly out of all proportion – and punishment – for the breach. Certainly, the Claimant has adduced no evidence that the payment is proportionate to its loss.
44. In Lord Dunedin’s terms, the payment of £100 for entering the wrong registration number falls squarely in (a) and (c) of his four tests. The sum stipulated is extravagant in comparison to there cost to the Claimant of the Defendant entering the wrong registration number. And the penalty of £100 is the same for paying but entering the wrong registration number; and making no payment at all – a fundamental breach of contract. It is hard to conceive of a case in relation to which Lord Dunedin’s presumption about the same penalty for breaches of differing gravity could better apply.
45. And Lord Sumption’s conclusions in relation to ParkingEye in particular make it clear that the key issue is whether the charge protected the legitimate interests of collecting fees for parking and stopping overstayers from taking up parking places thereby maximising revenue for retailers. Plainly neither of these considerations apply in this case. £100 is out of all proportion to the Claimant’s interest in the efficient collection of parking fees.