The judgment is here.
The COA have neatly sidestepped the fundamental question of the appeal, which was whether penalties could be commercially justified.
The COA have neatly sidestepped the fundamental question of the appeal, which was whether penalties could be commercially justified.
Instead, they have ruled that PE’s charges should not be treated as penalties, and therefore unenforceable, because the level of charge is not ‘extravagant and unconscionable’ which they say is the true test of whether a clause is a penalty. Charges in line with council charges are acceptable.
In the HHJ Moloney hearing ParkingEye told HHJ Moloney their charges were in line with council penalties. However The Prankster has researched this and found this was a lie. In Cambridgeshire the council charges are £50, discounted to £25 if paid within 14 days. This is therefore half the level of the ParkingEye charge. (There are some higher level infringements charged at £70, but an overstay is £50)
They also say that there are social, or public policy, reasons why the charges should be enforced, because if they were not, the spaces in the car park would become unavailable for customers. They also say that PE would suffer a likely loss of contract with the BA Pension Fund if they were unable to perform the contract with them. (The Armageddon scenario).
It is also stated that the contractual arrangements between PE and the landowner are irrelevant for the purposes of this decision, so that blows the ‘fishing licence’ argument out of the water.
They have also said that the signage most likely creates a bare licence rather than a contract, although it was not in their remit to rule on that, but in any event the outcome would have been the same.
Their lordships thought the charge may actually be a contractual charge, rather than a charge for breach of contract. Their lordships thought this would make no difference but forgot that contractual charges attract VAT. This would therefore destroy ParkingEye's business model and require them to stump up significant backdated cash and penalties to HMRC.
Mr Hossain has prepared a submission requesting leave to appeal to the Supreme Court, Mr Kirk has made a submission opposing it, and the CA have sent in a statement supporting Mr Hossain’s application.
Permission to appeal was granted.
Happy Parking
The Parking Prankster