Theft of motor vehicles from lien holders

Members of the Motor Trade Association Incorporated (MTA) have reported increasing incidents of customers removing vehicles from repairers’ premises without paying the invoice for parts and labour due for payment, prior to collection of the vehicle. The customer then ignores the repairer’s requests for payment and retains possession of the vehicle. MTA members have found police reluctant to consider theft charges and are commonly advised that this is a civil matter.

The rights of a lien holder

A lien gives a right to keep possession of property, enforceable against anyone including an owner until a condition is satisfied. It is most commonly enforced until a debt due for repairs, parts or improvements, is paid in full.

For example, a motor vehicle repairer may claim a lien and refuse to return the motor vehicle to a customer until the parts and labour are paid for in full.

There is no formal procedure necessary to claim a lien. A (motor vehicle) repairer simply refuses to return the item or motor vehicle to the customer until the parts and labour are paid for.

To claim a lien the following criteria must be satisfied:

• Lawful possession has been obtained with the express or implied authority of the owner for work or repairs to be carried out.
  
• The work is an improvement or repair; maintenance is not covered.
  
• Continuous possession is maintained on the repairer's premises. Once the property leaves the premises, the right to a lien is lost. The right is not revived by a subsequent recovery of possession. Accordingly, if the terms of trade provide credit or payment on the 20th of the following month rather than 'cash on delivery', a lien cannot be claimed as possession will be lost.

A lawful lien will override the interests of a person or company holding a security interest or charge registered against the property (even if the interest or charge prohibits the creation of a lien) when the repairer has no knowledge of the security interest and the materials and services relating to the lien are provided in the ordinary course of business.

If the property is under hire purchase, the agreement may prohibit the creation of a lien. Where a repairer has notice of this before commencing work, a lien cannot be claimed.

A lien expires once the debt for repairs is paid. A lien does not cover payment for other expenses such as storage or maintenance costs and penalty interest unless the terms of supply expressly provide for such expenses and the customer has had notice of those terms.

A criminal or civil matter?
Unlawful removal of a vehicle by an owner breaches the lawful possessory interest of the repairer in the repaired vehicle pursuant to the lien and also any applicable “romalpa clause” providing that title to parts does not pass to the owner until payment is made in full.

In these circumstances an owner can properly be charged with theft of the parts or of their “own” vehicle, as the worker’s lien is a legally enforceable interest, rendering the repairer the “owner” for the purposes of sections 218 and 219 of the Crimes Act 1961.

It must be emphasised any criminal charges laid will not result in the repairer recovering monies owed. The criminal law is not a mechanism for debt collection; any monies owing to the repairer must be pursued by civil action.