Park At Your Own Risk! Who is Liable for Losses to Your Car? - Malaysia

Raju parked his car at a paid parking space in a Mall.

A couple of hours later when he returned to his car, he found his car broken into and he had lost his laptop together with RM300.00 worth of cash.

Raju complained to the Mall’s Parking Management that they should have acted more responsibly to safeguard his car. The Manager replied that Raju is to be blamed for his own losses whilst pointing to a signboard stating “Park at your own risk”.

What is an Exclusion Clause?

Exclusion clause or exemption clause is defined as clause in a contract or term in a notice which purports to restrict, exclude, or modify a liability, duty or remedy which would otherwise arise from a legally recognized relationship between the parties.

This includes statements which you can see at various businesses including parking spaces, hotels or even restaurants. This is done by the owner of the said business to exclude any liability which arises in their course of business.

Incorporation of an exclusion clause into a contract can be done in several ways. It can either be by giving a notice, through a course of dealing or by signature on a written document. It is important for the party relying on the exclusion clause to ensure that the exclusion clause is visible and made known to the other party.

In Malaysian Newsprint Industries Sdn Bhd v Perdana Cigna Insurance Bhd & Ors [2008] 2 MLJ 256, the Court of Appeal held that ‘to deny the legitimacy and effectiveness of an exclusion clause for which it was designed, would render it meaningless. The exclusion clause was clear and the words used were easily definable, with no absurdity, inconsistency or repugnancy when arriving at a straightforward interpretation’.

What is the Effect of an Exclusion Clause?

An exclusion clause could change the effect of a contract. For instance, if a person lost his valuable items from a car parked in a parking lot stating, ‘park at your own risk’, he cannot then claim from the parking lot owner for damages. This is because there was a clause stating park at your own risk for the place parked at.

In Olley v Marlborough Court Ltd [1949] 1 KB 532, the plaintiffs, a husband and wife, paid for lodging at the defendant’s hotel. In the hotel room, there was a notice stating that the hotel would not be liable for the theft or loss of any items in the room. The wife’s fur coat was stolen from the room when they went out for a stroll. The defendant argued that the notice in the room was incorporated into the contract. The Court of Appeal held that the contract had been entered into before the plaintiffs entered the room in the hotel, and as notice of the exclusion clause was only given after the contract was entered into, it was not incorporated into the contract.

In another case of Thornton v. Shoelane Parking [1971] 1 All ER 686, it was held that for exclusion to be incorporated into a contract, there must be adequate warning. Mr Thornton was injured and not his car in an accident. The display sign said “parking at own risk”, but the park’s further terms were issued by dispenser machine excluding personal injury. He did not read the part on the exclusion of personal injury until the accident occurred. The court still allowed him to claim for personal injury as there was not sufficient notice given to him about such exclusion as the contract was already made when he entered the parking place when he was unaware of it.

A miscellaneous issue is how negligence plays out in the context of an exclusionary clause.

In Malaysia, the rules for constructing an exclusion clause where negligence was involved were applied in Premier Hotel Sdn Bhd v Tang Ling Seng [1955] 4 MLJ 229 where in this case, the respondent stayed at a hotel owned by the appellant. He went out one afternoon and left his room key with the hotel receptionist. The receptionist gave the key to an unknown person who said that some of the respondent’s workers had come to collect his key. Upon his return, the respondent found that his personal belongings in his room were missing.

The appellant’s Hotel Regulation contained the following exemption clause: ‘The Hotel will not assume responsibility for valuables or money lost from the room.‘

The court held that the general words would not ordinarily protect a party from liability for negligence. To be effective, the words must be sufficiently clear, either by referring to negligence or by using some other expression such as “however caused”.

Conclusion

Therefore, for the exclusion clause at the Mall’s Parking area to be applicable to Raju, it is important that he was sufficiently notified of the exclusion clause prior and/or at the time of parking at the premise.