It’s a sad truth that in tough economic conditions, people are sometimes unable to pay for work that they’ve engaged a business to carry out on their behalf. We see this time and time again, especially in the motor vehicle industry (e.g. mechanic’s workshops), computer repair businesses, spray painting businesses, watch repair, jewelers and many others.
So, what happens when a customer leaves an item with you for repair (e.g. a car) and refuses to pay for the work that was performed?
Where such situations arise, businesses may be entitled to sell the customer’s property and recover payment if they follow the requirements of the Disposal of Uncollected Goods Act 1967 (Qld) (the Act). By following the process set out in the Act, the business owner may recover payment and be protected from any legal claims by the owner.
So how does it work?
You must clearly display a sign at your business premises which states that you accept the goods for inspection, custody, storage, repair or other treatment in accordance with the terms of the Act. The sign must also make it very clear that any such goods may be sold 6 months after they became ready for collection. Here’s an example:
‘How We Treat Uncollected Goods
We accept your goods for inspection, custody, storage, repair or other treatment in accordance with The Disposal of Uncollected Goods Act 1967 (Qld).
Pursuant to this Act, any uncollected goods may be sold six (6) months after the date on which they become ready for collection.’
In practice, it takes much longer than 6 months before you can sell a customer’s goods. Here’s why.
Using the car as an example, once it’s ready for collection, the business must provide the customer with notice that it is ready. The customer must also be informed that if he/she fails to collect the car within 6 months, the item may be sold. Once the six-month period has passed, the business must provide the customer with additional notice of its intention to sell the vehicle. Only then, and after giving the customer the required warning, will a business be entitled to apply to the court for an order allowing it to sell the car.
There are some further steps that need to be taken at this juncture, so if you find yourself at this point, it’s wise to seek prompt legal advice. Penalties apply if items are sold without following the correct procedure, and the business may also be exposed to a legal claim from the owner of the goods.
If you are a business owner in this predicament, or you are a customer whose goods are at risk of being sold, speak to the team at Axia Litigation Lawyers – because Every Move Matters.