Hall & Wilcox has been involved in a series of cases which deal with the application of the Accident Towing Services Act 2007 to motor vehicle repairers, specifically whether a repairer is entitled to detain a vehicle to secure payment of towing, storage and other charges.

In the case of Insurance Manufacturers of Australia Pty Ltd v Barlea Panels Pty Ltd Hall & Wilcox acted on behalf of Insurance Manufacturers of Australia (IMA). IMA insured the owner of a vehicle involved in a collision. The vehicle was towed to the repairer’s premises to be quoted for repair. The insured verbally agreed to pay the cost of storing, towing, quotation, administration and a ‘parts liaison’ fee. She also signed an authority to repair the vehicle.

The repairer prepared a quotation for repair but the vehicle was subsequently assessed by IMA to be a total loss. IMA settled the claim under the terms of the policy and, in so doing, became the owner of the vehicle.

When IMA requested the release of the vehicle, the repairer claimed an entitlement to recover from IMA numerous charges allegedly authorised by the insured. The repairer refused to provide an invoice until IMA informed it of the date that the vehicle would be removed.

IMA issued proceedings in the Magistrates’ Court against the repairer seeking delivery up of the vehicle. By counterclaim, the repairer sought the various fees and an ongoing rate of storage while the vehicle was on its premises. By the time the vehicle was released 18 months later, the repairer claimed a sum in excess of $20,000 from IMA.

At the hearing IMA successfully argued that it was entitled to possession of the vehicle and that the repairer had wrongfully detained it. Importantly, IMA was not privy to any agreement said to have existed between the insured and the repairer.

The repairer claimed that it was exempt from the Accident Towing Services Act (specifically section 153 of the Act, which requires written authorisation of costs sought from the insurer) because the vehicle was not towed to the repairer directly from the scene of the accident. This argument was rejected by the Magistrate, who confirmed that the Act applies generally to all repairers and towing operators regardless of the circumstances in which a vehicle comes into their possession. As the repairer had not obtained written authority from either the insured or IMA to charge the fees sought, section 153 of the Act prevented it suing for any charges not authorised in writing.

Her Honour also considered that section 153(2)(d) of the Act prevented the recovery of storage fees unless the amount claimed was in accordance with the statutory rate prescribed by the regulations (currently $15.90 per day).

The Magistrate also rejected a factual argument on behalf of the repairer that it had not refused to release the vehicle, but rather IMA had failed to indicate when it would collect the vehicle, so the repairer could provide an invoice. Her Honour held that by making delivery conditional, the repairer’s conduct amounted to a constructive refusal to release the vehicle.

This decision represents a welcome confirmation of the law in this area. It confirms the broad application of the Act and demonstrates that a failure to obtain authority for fees and charges in writing is almost certainly fatal to a repairer’s claim for fees.