Beavis v Parking Eye - Judgment

[Fredfred]

Hi, I understand that the Supreme Court is due to give a ruling on the ParkingEye vs Beavis appeal sometime in October (2015). Does anyone know which specific date in October it is due please?
Many thanks!

[Kati]

Re: When is the Supreme Court Beavis ruling due?

[MENTION=5354]mystery1[/MENTION] will know the answer to this (I've tagged him) xx

[mystery1]

Re: When is the Supreme Court Beavis ruling due?

Hi, I understand that the Supreme Court is due to give a ruling on the ParkingEye vs Beavis appeal sometime in October (2015). Does anyone know which specific date in October it is due please?
Many thanks!

It might not be October. Supreme court rulings are announced on a Wednesday and they usually tweet which ones are coming 6/7 days before. It won't be out on 21/10/15 and can be any Wednesday after that.

M1

[Fredfred]

Re: When is the Supreme Court Beavis ruling due?

Thanks M1 and Kati. Very helpful information.

[Nibbler]

Re: When is the Supreme Court Beavis ruling due?

https://www.supremecourt.uk/cases/uksc-2015-0116.html

Due Wednesday 4th November

[Amethyst]

Re: When is the Supreme Court Beavis ruling due?

Handing down this morning, starts 9.45 - https://www.supremecourt.uk/live/court-02.html

[Amethyst]

Re: When is the Supreme Court Beavis ruling due?

Judgment details

• Judgment (PDF)
• Press summary (PDF)

Beavis lost.

The Supreme Court allows the appeal in Cavendish v El Makdessi and dismisses the appeal in ParkingEye v Beavis, thus upholding the validity of the disputed clauses in both cases. Lord Neuberger and Lord Sumption give a joint judgment, with which Lord Clarke and Lord Carnwath agree. Lord Mance and Lord Hodge write concurring judgments. Lord Toulson agrees that the appeal in Cavendish v El Makdessi should be allowed but dissents in ParkingEye v Beavis.

Application to ParkingEye v Beavis
The court dismisses the appeal by a majority of six to one, and declares that the charge does not contravene the penalty rule, or the Unfair Terms in Consumer Contracts Regulations 1999.
Mr Beavis had a contractual licence to park in the car park on the terms of the notice posted at the entrance, including the two hour limit. The £85 was a charge for contravening the terms of the contractual licence. This is a common scheme, subject to indirect regulation by statute and the British Parking Association’s Code of Practice. The charge had two main objects: (i) the management of the efficient use of parking space in the interests of the retail outlets and their users by deterring long-stay or commuter traffic, and (ii) the generation of income in order to run the scheme [94-98].
Unlike in Cavendish v El Makdessi, the penalty rule is engaged. However, the £85 charge is not a penalty. Both ParkingEye and the landowners had a legitimate interest in charging overstaying motorists, which extended beyond the recovery of any loss. The interest of the landowners was the provision and efficient management of customer parking for the retail outlets. The interest of ParkingEye was in income from the charge, which met the running costs of a legitimate scheme plus a profit margin [99]. Further, the charge was neither extravagant nor unconscionable, having regard to practice around the United Kingdom, and taking into account the use of this particular car park and the clear wording of the notices [100-101].
The result is the same under the 1999 Regulations. Although the charge may fall under the description of potentially unfair terms at para. 1(e) of Schedule 2, it did not come within the basic test for unfairness in Regulations 5 and 6(1), as that test has been recently interpreted by the Court of Justice in Luxembourg [102-106]. Any imbalance in the parties’ rights did not arise ‘contrary to the requirements of good faith’, because ParkingEye and the owners had a legitimate interest in inducing Mr Beavis not to overstay in order to efficiently manage the car park for the benefit of the generality of users of the retail outlets. The charge was no higher than was necessary to achieve that objective. Objectively, the reasonable motorist would have, and often did, agree to the charge [106-109].
Lord Mance and Lord Hodge both concur [188-214; 284-288].
Lord Toulson (dissenting) would have allowed the appeal, on the grounds that the clause infringes the 1999 Regulations, which reflect the special protection afforded to consumers under the European Directive on unfair terms in consumer contracts. The burden is on the supplier to show that the consumer would have agreed to the terms in individual negotiations on level terms. It is not reasonable to make that assumption in this case, and in any event ParkingEye had not produced sufficient evidence to that effect [309-315].

[Amethyst]

Re: When is the Supreme Court Beavis ruling due?

BBC NEWS - https://t.co/krbItXa0lr

WHICH? https://t.co/EsK0zYUMPv

John De Waal QC - http://legalbeagles.info/the-law-on-...hn-de-waal-qc/

[Amethyst]

Re: When is the Supreme Court Beavis ruling due?

This will be much poured over I suspect..

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.

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 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’ rights and obligations arising under the contract, to the detriment of the consumer.”
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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.

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
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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 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.
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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 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.

[Smasher]

Re: Beavis v Parking Eye - Judgment

Hmm, why am i not surprised..

I had 4 of those who just stopped persuing me after a few letters. I and I'm sure many others like me, should probably expect a demand soon..