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IN THE SUPREME COURT OF JUDICATURE CCRTF 96/1571/C

IN THE COURT OF APPEAL (CIVIL DIVISION)

(HIS HONOUR JUDGE TYRER )

Royal Courts of Justice

Strand

London WC2

Wednesday, 9 July 1997

B e f o r e:

LORD JUSTICE BUTLER-SLOSS

LORD JUSTICE THORPE

LORD JUSTICE JUDGE

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SERVICE MOTOR POLICIES AT LLOYDS

Plaintiff/Respondent

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CITY RECOVERY LIMITED

Defendant/Appellant

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(Computer Aided Transcript of the Palantype Notes of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 831 3183

Official Shorthand Writers to the Court)

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MR GUY PRICHARD (Instructed by Retail Motor Industry Federation, Legal Department, London, W1N 6AB) appeared on behalf of the Appellant

MR SIMON DAWES (Instructed by Maxwell Entwistle & Byrne, Liverpool, L2 OSG) appeared on behalf of the Respondent

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J U D G M E N T

(As approved by the Court )

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©Crown Copyright

LORD JUSTICE BUTLER-SLOSS: I will ask Judge LJ to give the first judgment.

LORD JUSTICE JUDGE: This is an appeal by City Recovery Ltd from the decision of His Honour Judge Tyrer at Milton Keynes County Court on 14 October 1996 holding that the plaintiffs were entitled to possession of two motor cars. The appeal raises a point of construction of the provisions of the Road Traffic Regulation Act 1984 of some general interest as there is conflict between the interests of innocent victims of car theft or, perhaps more importantly, their insurers and those whose services are used to remove abandoned cars from places in which they have been dumped. Such services do not come free.

On 17 May 1995 a Ford Fiesta XR2, registration number J57 SRX owned by Mr J D Taylor was stolen. The plaintiffs settled Mr Taylor's claim in accordance with his insurance arrangements and assumed legal title to the vehicle. On 7 December the car was found abandoned in a driveway of an address at Milton Keynes under a false number plate. The Thames Valley police sent for the defendants and instructed them as their agents to arrange for the removal and recovery of the car. This was done. The car was worth £6,000. The defendants retained possession of it.

On 30 November 1995 a Vauxhall Astra car owned by Mr A R Pinney registration number E36 VOL was stolen. It was found by the Thames Valley Police on 18 December 1995. By then it was a burnt out wreck worth a token £50 for scrap. At the request of the police the defendants recovered the wreck. The insurers demanded its return. They subsequently settled Mr Pinney's insurance claim and having done so they assumed legal title to the wreck. Nevertheless the defendants retained possession of this vehicle too.

The defendants' position was that neither vehicle would be returned until the plaintiffs or their agents paid for the appropriate recovery charges and storage fees. The defendants claimed a lien on each car and a right to possession until such payment. Their rights were said to arise under the legislative provisions which govern the removal of abandoned vehicles and this appeal is concerned with the extent of the rights created by the legislation.

The current legislation stems from the Refuse Disposal (Amenity) Act 1978 and is now set out in the Road Traffic Regulation Act 1984. Section 99 of the 1984 Act provides for circumstances in which abandoned or broken down vehicles may be removed from the position in which they have been found.

By contrast with section 100, which provides for the interim disposal of such vehicles and arrangements for their safe custody, section 101 of the Act provides for their "ultimate" disposal.

The relevant part of section 101(1) provides:

"a competent authority may, in such manner as they think fit, dispose of a vehicle which appears to them to be abandoned..."

The local police fall within the definition of "competent authority", and when the defendants acted as they did in relation to each vehicle their actions were authorised in accordance with an agreement between them and the police which called itself the Garage Call Out Scheme. Assuming that the time for disposal in accordance with section 101(3) has arrived, the powers granted under section 101(1) are wide enough to enable the competent authority to override the wishes of the true owner over abandoned vehicles which have been removed in accordance with the provisions of the Act. Nevertheless they remain subject to the limitation imposed by section 101(4). This provides:

"If, before a vehicle (found outside Greater London) is disposed of by an authority ... the vehicle is claimed by a person who satisfies the authority that he is its owner and pays such sums in respect of its removal and storage as may be prescribed to the authority entitled to those sums, the authority shall permit him to remove the vehicle from their custody within such period as may be prescribed."

The conditions are plain. There must be a claim to the vehicle. The claimant must be its owner. He must pay the prescribed sums for removal and storage. The authority is "entitled to be paid." Then if payment is made, but only then, assuming that the vehicle has not already been disposed of the owner must be permitted to recover his owner vehicle. The relevant sums are prescribed by the Removal, Storage and Disposal of Vehicles (Prescribed Sums and Charges) Regulations 1993.

Section 101(5) provides:

"If, before the end of the period of one year beginning with the date on which a vehicle (found outside Greater London) is sold by an authority in pursuance of this section, any person satisfies that authority that at the time of the sale he was the owner of the vehicle, that authority shall pay him any sum by which the proceeds of sale exceed the aggregate of such sums in respect of the removal, storage and disposal of the vehicle as may be prescribed."

This subsection underlines the statutory entitlement to prescribed sums for storage and removal; the original owner of the vehicle does not recover the proceeds of sale in their entirety but simply the balance left after deduction of the prescribed sums.

Section 102 is directly concerned with the charges which may be made by an authority exercising the statutory duties under the legislation which are recoverable from the person "responsible" for them whether he applies for the return of the vehicle or not. He is defined for the purposes of section 102 alone as:

"(a) the owner of the vehicle at the time when it was put in the place from which it was removed ... unless he shows that he was not concerned, and did not know of its being there

(b) any person by whom the vehicle was put in that place

(c) any person convicted of an offence under section 2(1) of the Refuse Disposal (Amenity) Act 1978 in consequence of the putting of the vehicle in that place..."

Neither Mr Taylor nor Mr Pinney nor for that matter their insurers was concerned with or knew of the dealings of the thieves with their respective vehicles and none of them fell within this definition. Accordingly they were exempt from charges made under section 102.

In these circumstances it was argued before the Judge that as the defendants failed to establish their entitlement to make charges against the owners of the vehicles under section 102 they lacked any justification for their refusal to restore the vehicles to their owners unconditionally. The defendants suggested that their justification was provided by section 101(4) and that they were not required to return the vehicles to their owners until the prescribed sums for removal and storage had been paid. The Judge held that the provisions of section 101(4) were clearly subject to section 102. Accordingly he found for the plaintiffs.

The defendants have appealed. The plaintiffs have provided a skeleton argument and have attended by counsel. On reflection both counsel are agreed that the Judge's conclusion in this case was wrong. I agree with them.

In my judgment the construction adopted by the Judge is not warranted. Unless sections 101 and 102 were concerned with different situations it would not have been necessary to enact them both nor to provide a separate regulation making power in each of them. The provision exempting innocent vehicle owners from charges is confined to section 102 itself. No similar saving provision appears or is applied to section 101 and if it had been intended that the exemption in section 102 should extend to the circumstances covered by section 101 the section would have been drafted accordingly. Section 101 focuses on prescribed "sums" whereas section 102 focuses on prescribed "charges", a distinction highlighted by the regulations made under both sections which throughout maintain the distinction between prescribed sums and prescribed charges, a distinction highlighted by the reference in the title to prescribed charges and sums.

The difference between the two sections is identified in the heading to section 101 which is concerned with the ultimate disposal of abandoned vehicles after the appropriate time and circumstances for disposal have arisen. In such cases the owner is not precluded from seeking the return of his vehicle. If he does so then the prescribed sums for removal and storage must be paid. If he does not, the vehicle is disposed of, and if that happens he must give credit for the removal and storage sums before he can recover the balance of the proceeds of sale. In other words, although not strictly speaking a lien, before a vehicle to which section 101 applies must be returned to its owner there is a price to be paid for its recovery and storage, but once it has been paid (or I would add, a genuine offer to pay has been made) the garage cannot then continue to retain the vehicle.

By contrast liability to pay charges under section 102 arises against those responsible for dumping a vehicle or parking or leaving it in an inappropriate place. It is unnecessary for the purposes of this judgment to recite all the situations in which section 102 will arise. But the charge under section 102 arises whether or not a claim is made for the return of the vehicle and this no doubt explains why it was felt appropriate to provide a measure of protection from such liabilities for the innocent owner.

In the court below and before this court it was accepted that both these cars fell within the ambit of section 101 and accordingly, in my judgment, the defendants were not required to surrender up possession of either vehicle until the prescribed sums for removal and storage had been paid.

Accordingly I should allow this appeal.

LORD JUSTICE THORPE: I agree.

LORD JUSTICE BUTLER-SLOSS: I also agree.

Order: Appeal allowed with costs; no order as to costs below.