Road Safety Amendment, Private Car Parks Bill 2015

Ms GARRETT (Minister for Consumer Affairs, Gaming and Liquor Regulation) — I move:

That this bill be now read a second time.

Speech as follows incorporated into Hansard under sessional orders:

This bill will meet the government’s commitment to protect Victorians from the unfair and misleading practices of some private car park operators. It will achieve this by amending the Road Safety Act 1986 to restrict the ability of private car park operators to obtain the names and addresses of vehicle owners from VicRoads to recover private car park fees.

A number of car park operators operate under a business model whereby customers are required to estimate the amount of time they will stay on entry to the car park, buy a ticket for the appropriate period, and then display it on their dashboard.

If a customer either fails to obtain a ticket, or parks for longer than the period they paid for, an inspector employed by the car park operator may place a notice on the vehicle’s windscreen. The notice looks similar to an infringement notice, but is actually a claim for liquidated damages.

Where a customer does not pay the amount specified in the payment notice, the car park operator can obtain a preliminary discovery order in the Magistrates Court requiring VicRoads to disclose the name and address of the registered owner of the vehicle in question. The car park operator will then write a series of letters of demand, demanding that the customer pays the amount owed, plus an additional late payment fee.

Alternatively, a customer may not receive a notice claiming liquidated damages, but instead first find out about a claim when they are sent a letter of demand from the car park operator demanding payment.

Additionally, it is common practice for the car park operators to onsell the debts to debt collection agencies. These agencies will proceed to write similarly threatening letters of demand to the car park customers.

These practices have given rise to a number of matters of significant public concern.

The actions of these car park operators amount to an abuse of court process. The rules of preliminary discovery, as set out in the relevant court rules, allow applicants to seek information to assist in identifying a person against whom they wish to commence proceedings. However, some car park operators are using the preliminary discovery process not as a genuine preliminary to a potential court proceeding, but instead to support a business model of posting mass demands to customers and relying on a proportion of them paying.

On average, car park operators are requesting the details of over 50 000 vehicles per year. In some instances, car park operators are using single applications to request the details of over 1000 vehicles. It is impossible for a court to properly assess whether a potential cause of action exists in relation to each of these applications. In practice, only an extremely small number of these disputes actually result in car park operators commencing civil proceedings in a court.

Additionally, there is a risk that the uncontrolled release of information under preliminary discovery could undermine the community’s confidence in the ability of the government to protect their personal information. It also has the potential to affect the integrity and accuracy of data held by government agencies because customers may become reluctant to update their records knowing that it may be released to private companies.

Lastly, these practices raise significant consumer protection issues. Recent decisions of the Supreme Court and the Victorian Civil and Administrative Tribunal have found that the liquidated damages the car park operators are seeking are unenforceable. This is because the damages being sought do not reflect the actual losses suffered by the car park operator, and should more properly be categorised as a penalty. These decisions have also found that consumers either do not understand the nature of the letter of the demand, believing it to be an infringement notice that must be paid, or are otherwise being misled by car park operators.

In addition, there have been cases of incorrect vehicle registration information being provided to VicRoads. This has resulted in car park operators sending letters of demand to the owners of vehicles that were not involved in the alleged breach. There have also been cases of car park customers receiving payment notices for trivial breaches of a car park’s terms and conditions, such as placing the ticket on the wrong side of the vehicle’s dashboard, or customers not receiving letters of demand until nearly two years after the alleged breach.

In order to address these significant concerns, the bill will amend the Road Safety Act 1986 to restrict the ability of private car park operators from obtaining the names and addresses of vehicle owners from the VicRoads registration database. It will do this by abrogating the right of a person to obtain a preliminary discovery order from a court for the purposes of recovering private car park fees.

This amendment will inhibit the practice of car park operators abusing the process of preliminary discovery to support a dubious business model of posting mass demands to customers for liquidated damages that have been found to be unenforceable.

Preliminary discovery for the purposes of recovering private car park fees under a written contract signed by both parties would be exempt from this restriction. The purpose of this exemption is to enable private car park operators to commence legal proceedings in relation to breaches of long-term, commercial, parking agreements. Such proceedings may involve legitimate claims for significant sums of money.

This is a simple and worthwhile reform.

I commend the bill to the house.

Debate adjourned on motion of Mr NORTHE (Morwell).