The claiming of storage costs by motor vehicle repairers has been the subject of many a legal dispute
in the past. Motor vehicle mechanics and panel beaters alike, often only possess limited space in
their workshops and cannot retain motor vehicles which have been repaired on their premises for
any extended period as such vehicles take up the space required for new business. The situation is
exacerbated where there is an outstanding account for the services rendered. ,By releasing the
vehicle, the garage owner forgoes his retention right which often is his only security for payment of
his account In an attempt to retain his security, whilst simultaneously limiting his damages due to
not being able to conduct new business in the space occupied by the repaired vehicle, the repairer
charges storage costs for the repaired vehicle.

Is the aforesaid conduct of refusing to release a vehicle whilst at the same time charging storage
costs legally enforceable? If such terms are recorded in a valid contract between the motor vehicle
repairer and the owner, there should not be any issue therewith provided that the storage rates
charged are reasonable and the repairer limits his “damages” suffered as a result of the space
occupied by instituting legal proceedings for the payment of the outstanding account within a
reasonable time.

What, however, if there is no contract dealing with the charging of storage fees?
In the very old authority of Laingsburg School Board v Logan (1910) 27 SC 240 , the court had to
decide on whether a person, A, was entitled to charge rent for the storage of goods belonging to
another, B, after the delivery of the goods had been demanded by B. In this matter B instituted legal
proceedings against A for the delivery of the goods from A or in the alternative the value of the
goods and tendered payment for a period of three months when the demand for the goods were
made. At the date of the demand there was a dispute between the parties as to whether rent was
payable at all for the storage of the goods. A retained the goods despite the demand by B. A was of
the view that he was entitled to retain the goods and charge storage for it until payment of the
amount.

The court in coming to its conclusion reasoned that had B voluntarily allowed his goods to remain on
A’s premises “there would have been strong ground for the inference that he bound himself to pay
rent for the storage, but no such inference is possible where the goods were retained against his
will”. (The court in this instance did not deal with a situation where B was aware of the storage costs
and did not take any steps to have his goods returned.)

In coming to its finding, the court referred to English case law where it was held that a person who
has a lien on movable goods for a debt cannot add to the amount, for which the lien exists, charges
for storing the moveable goods until the debt under the lien is paid up and found that our law is no
different. The court found that where there is no provision in law (as would be a term in a valid
contract) which obliges the paying of the creditor’s charges for storing the goods under the lien, the
debtor cannot be held liable for such storage costs. The court was of the view that A who had
possession of the goods of B, could have instituted legal proceedings against B for the outstanding
rent when B disputed his liability for the rent and on obtaining judgment could have enforced the
payment of the outstanding rent by executing against the property under the lien.

The law pertaining to retention rights and security for debts in general can be quite complex with
many unexpected pit-falls. Repairers of goods such as vehicles are advised to approach qualified
legal practitioners for assistance in the event where they are faced with having to retain goods
pending the payment of outstanding accounts to avoid falling victim to legal technicalities.

RMI4law members enjoy the benefit of legal advice from an attorney 24 hours a day. If you wish
to join RMI4law, call 0861 668 677.
Andries Stander is a director in the litigation department at Barnard Incorporated in Centurion.
Legalex (Pty) Ltd, registration number 2003/003715/07, is an authorized Financial Services
Provider (FSP 5277) and underwritten by Guardrisk Insurance Company Limited (FSP 26/10/75)

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