The thorny question of storage charges

legal_updates

The problem with recovering storage charges is due to a Court of Appeal decision in 2001.

Author: Jason Williams
Published:
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This article is 3 years old.

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A customer comes into the workshop and hands over the keys to their car with the request that you undertake work to this, that and the other.  You provide them with a written quote and they sign it asking that you call them when the work is complete.

A few days later and your garage is sitting with a bill for £830 for parts and labour as per the quotation.  You ring the customer – but he does not answer.  You leave a voice-message asking to call in to collect his now repaired vehicle but still silence.  You only took his name and telephone number – no address.   The deadline passes and still nothing.

You have a dilemma.  You don’t want to put the car out on the highway just in case, in the middle of the night, Mr customer sneaks along with a spare key and disappears into the sunset with a fully functioning car without paying for it.

On the other hand, your storage facility on-site does not really have enough space to comfortably keeping his car on it and so you decide to invoke the storage charge on the basis that all the risk in the car is now on your shoulders.  If it gets damaged (or, heaven forbid, destroyed) whilst on your property your garage or your insurers will carry the can.

Then, two months later, the customer comes back in with £830 and a tissue of excuses up his sleeve.  You take his £830 but refuse to move the car back into his possession until he has paid the storage charges.  He refuses to pay.  You come to us for advice.

The problem with recovering storage charges is due to a Court of Appeal decision in 2001.  Malcolm Morris v Beaconsfield Motors.  And whilst that is now 17 years old, all lower courts are bound by the decision unless it is over-turned by the same or higher court.

That ruling is that, in general, you cannot charge for storage charges on the basis that the garage cannot recover from the customer the cost of expenses or losses incurred by that garage, which is exclusively for their own benefit in maintaining the right of lien (possession and possible sale) of the vehicle to which the debt relates to.  

It is not clear what would happen if the consumer is told that storage charges would be applied as those charges would then be payable under a separate contractual obligation.  Variations to a contract cannot always be enforced through acquiescence (silence) of the other party.

Our advice therefore is simple – when supplying a quotation – or similar – make it clear in writing (stating the address of the customer) that if the repairs are not paid for within 7 days of the invoice date, a storage charge of £x per day applies – and get your customer to sign directly next to it confirming that they are in agreement with that term.

Jason Williams

Legal Advisor

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