Deciding whether or not you can enter a third party’s premises to repossess your goods is always tricky. Can you? Can’t you? What if your agreement says you can?
The simple answer is - don’t - and here’s why.
Despite any clause in your agreement which might state otherwise, your customer cannot grant you the authority to enter onto land that is not its own.
Entry onto a third party’s land without the permission of the occupier, or otherwise without lawful authority, will constitute a trespass. And whilst you might have a defence in “recaption of chattels” (retrieving your own property that has been taken by another), the fact is you will need to defend the claim in trespass – and no one wants to be defending a claim, even if you are likely to succeed.
Does the same apply to your customer’s premises?
This is a little more complicated and depends on the circumstances (see also below, re Consumer Leases).
Generally speaking, by virtue of section 4 of the Inclosed Lands Protection Act 1901 (NSW), entry upon any property which is an “inclosed land” (defined as “prescribed premises” or any land, “..inclosed or surrounded by any fence, wall or other erection, or partly by a fence, wall or other erection and partly by a canal or by some natural feature such as a river or cliff by which its boundaries may be known or recognised, including the whole or part of any building or structure and any land occupied or used in connection with the whole or part of any building or structure.”) …without lawful excuse” is a trespass. This includes your customer’s premises.
What constitutes a lawful excuse?
Whilst there is no exhaustive list of what may be considered a lawful excuse, it is up to the party that enters the premises to prove that it had a lawful excuse for the entry.
A defence of consent will normally be raised where a customer’s agreement contains a clause specifically granting permission to enter its premises, and that will usually be accepted as a lawful excuse.
A defence of necessity may be raised when there is a genuine belief that the goods will otherwise be disposed of or destroyed.
Having a lawful excuse does not, however, entitle you to use force to repossess. For example, in the matter of Toyota Finance Australia Ltd v Dennis, the Court held that the owner of the goods (in this case a vehicle) was unable to use force to regain possession of the vehicle even though the initial possession was lawful (by way of agreement, in that case hire purchase).
What if you have entered into a “Consumer Lease” as defined by the National Consumer Credit Protection Act 2009?
Regardless of any entitlement to repossess in your agreement, if you have entered into a consumer lease, you must adhere to the National Consumer Credit Protection Act 2009 (Cth) (“the Act”), which contains specific provisions as to repossession, including the notice period required to be given to your customer prior to repossessing.
For the purposes of the Act, a consumer lease is a contract for the hire of goods by a person (or strata corporation) for personal, domestic or household use, where the person does not have the right or obligation to purchase your goods. It does not apply to a consumer lease for a fixed period of 4 months or less or for an indefinite period.
If you have entered into a consumer lease, you are required to do the following prior to repossession (regardless of any clause in your agreement):
- If your customer has signed up to pay by direct debit, give notice of the first default in accordance with section 179C(2) of the Act, within 14 days of the default (see form 18 of the prescribed forms);
- Give at least 30 days’ notice of any further default, including notice under section 179C (see form 18A of the prescribed forms);
- You must get your customer to sign an executed form 19 - Consent to Enter Premises prior to entering your customer’s premises (see form 19 of the prescribed forms).
Repossession of goods is complicated.
You should consider the wording of your agreement and the effect of the relevant legislation carefully. Tread lightly and don’t simply rely upon an entitlement to repossess contained within your agreement.