Service Motor Policies At Lloyds v City Recovery Limited

Under the Road Traffic Regulation Act 1984, the prescribed sums payable before the return of an abandoned vehicle under section 101 are distinct from the charges recoverable under section 102 from persons responsible for placing or leaving it. The section 102 protection for an innocent owner is confined to those charges. It does not remove the section 101 condition requiring payment for removal and storage. Where section 101 applies, the vehicle may be retained until payment, or a genuine offer to pay, is made. It must then be released.

Two vehicles stolen from private owners were recovered by a garage at police request. The insurers paid the owners’ claims, acquired legal title and sought possession. The garage retained both vehicles until recovery and storage charges were paid, asserting statutory rights under the Road Traffic Regulation Act 1984.

At Milton Keynes County Court, Judge Tyrer held that section 101(4) was subject to section 102 and found that the insurers were entitled to possession. The Court of Appeal considered whether the innocent-owner protection in section 102 relieved the insurers from the payment condition in section 101(4).

Judge LJ delivered the judgment, with Thorpe LJ and Butler-Sloss LJ agreeing. The appeal was allowed. The County Court’s construction was wrong.

1. The statutory structure distinguishes the provisions governing ultimate disposal from those governing recoverable charges. Section 99 concerns removal, section 100 concerns interim disposal and safe custody, and section 101 concerns ultimate disposal of abandoned vehicles under the Road Traffic Regulation Act 1984. If sections 101 and 102 addressed the same situations, it would not have been necessary to enact both provisions or to provide separate regulation-making powers. The distinction between prescribed sums under section 101 and prescribed charges under section 102 is maintained throughout the regulations.
2. Section 101(1) gives a competent authority a wide power to dispose of an apparently abandoned vehicle once the statutory time and circumstances for disposal have arisen. Before disposal, section 101(4) requires a claimant to establish ownership and pay the prescribed sums for removal and storage before the authority must permit recovery. The court added that a genuine offer to pay is sufficient. Once payment or such an offer is made, the garage cannot continue to retain the vehicle. The right is not strictly a lien, although it permits retention pending payment.
3. Section 102 imposes charges on persons responsible for putting, dumping, parking or leaving a vehicle in the relevant place, whether or not a claim is made for its return. The statutory protection for an innocent owner is confined to liability under section 102. It does not qualify the separate recovery condition in section 101. Section 101(5) reinforces that prescribed removal and storage sums are deductible from sale proceeds.
4. Both vehicles were accepted to fall within section 101. The defendants were therefore entitled to retain possession until the prescribed removal and storage sums had been paid. Appeal allowed with costs; no order as to costs below.

• Milton Keynes County Court: On 14 October 1996, His Honour Judge Tyrer held that section 101(4) was subject to section 102 and found for the insurers.
• Court of Appeal (Civil Division): The appeal was allowed, with costs; there was no order as to costs below.